UPDATED, with comments from the FTC and Facebook: A federal judge today tossed out the Federal Trade Commission’s antitrust lawsuit against Facebook, concluding that the government failed to establish that the tech platform had a monopoly on social media networks.
The judge, James E. Boasberg, still left open the possibility that the government could revive the case by amending its complaint. But he wrote that the government’s case was “legally insufficient and must therefore be dismissed.”
Boasberg also dismissed a related lawsuit brought by 48 state attorneys general, who sued Facebook late last year around the same time as FTC.
The decision is a setback to the FTC’s efforts to rein in the power of the platforms. In its lawsuit, it had sought to break up Facebook, citing its acquisitions of Instagram and WhatsApp.
In the decision (read it here) Boasberg wrote that the FTC failed to back up its claim that Facebook had a dominant share of the market in excess of 60%. He wrote that the government’s “inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague ‘60%-plus’ assertion too speculative and conclusory to go forward.”
He also found fault with the government’s claim that Facebook’s refusal to offer interoperability with competing apps violated antitrust law, concluding that “there is nothing unlawful about having such a policy in general.” Boasberg noted that while it was possible that Facebook’s implementation of such a policy against specific apps may violate antitrust law, he suggested that too much time had passed to state such a claim. He wrote that “all such revocations of access occurred in 2013, seven years before this suit was filed, and the FTC lacks statutory authority to seek an injunction ‘based on [such] long-past conduct.'”
He said that the FTC was on “firmer ground” in challenging the acquisitions of Instagram and WhatsApp, rejecting Facebook’s claim that the FTC lacks authority to force Facebook to divest those purchases.
“Whether other issues arise in a subsequent phase of litigation is dependent on how the government wishes to proceed,” Boasberg wrote.
In dismissing the states’ lawsuit, Boasberg wrote that they simply waited too long to challenge Facebook. Unlike the federal government, he wrote, the states are bound by the doctrine of laches, in which those who “sleep on their rights” lose their ability to seek court relief. He noted that Facebook bought Instagram in 2012 and WhatsApp in 2014, yet the states’ case was filed in December. He also rejected the state’s claims on Facebook’s refusal to allow interoperability with competing apps.
“Such long-past violations cannot furnish a basis for the injunctive relief that Plaintiffs seek here,” Boasberg wrote.
A spokesperson for the FTC said, “The FTC is closely reviewing the opinion and assessing the best option forward.”
A Facebook company spokesperson said, “We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook. We compete fairly every day to earn people’s time and attention and will continue to deliver great products for the people and businesses that use our services.”
Although the decision is a victory for Facebook, lawmakers have targeted large tech platforms with a recent flurry of legislation. Last week, the House Judiciary Committee passed six antitrust bills, including one that mandates that platforms make their services interoperable with rivals, and another that would prohibit tech giants from buying up companies that threaten their dominance. One of the rationales for the legislation is that current antitrust laws are insufficient to curb the power of tech giants.
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