FTC complaint against Facebook struck down in court

Facebook won a temporary reprieve Monday in its battle with antitrust regulators.

The U.S. District Court for the District of Columbia dismissed the Federal Trade Commission’s antitrust complaint against the social media giant, calling it “legally insufficient.” It also dismissed a similar case brought by the attorneys general of 46 states.

“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services,” U.S. District Judge James E. Boasberg wrote in his ruling.

Facebook had filed to have the suits dismissed in March, arguing that the FTC had failed to adequately define a market where the company had monopoly power.

Boasberg appeared to agree with that argument. But while he dismissed the complaint, he did not dismiss the case entirely, inviting the FTC to amend its complaint and bring the case back to court.

The judge also told the FTC that it was “on firmer ground” scrutinizing Facebook’s acquisitions of Instagram and WhatsApp than it was in pursuing Facebook’s refusal to allow for interoperability, which would allow users to take their data to other platforms.

The case brought by the 46 states had focused on those acquisitions but was dismissed because too much time had elapsed since the events in question. 

The FTC, now headed by Biden-appointee Lina Khan, is now likely to return with a new lawsuit that focuses more directly on Facebook’s acquisition history. Khan has built her reputation on scrutinizing Big Tech.

Facebook stock jumped nearly 5 percent after the ruling, sending its valuation above $1 trillion.

“We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook,” a company spokesperson said. “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.”

The ruling comes as many politicians on both sides of the aisle have looked to rein in tech companies, though usually for different reasons. Sen. Josh Hawley, R-Mo., an outspoken Facebook critic, tweeted that the ruling was “deeply disappointing” since the court noted the company’s market power “but essentially shrugged its shoulders.”

Rep. Ken Buck, R-Colo., tweeted that the ruling showed “antitrust reform is urgently needed.”

“Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct,” he wrote.

Sen. Richard Blumenthal, D-Conn., also called for a review of antitrust laws.

“Though I believe this opinion was wrongly decided, it certainly shows just how broken our antitrust laws are,” he wrote said in an emailed statement. “The court rejected the FTC’s case because it wasn’t clear under our current antitrust laws that Facebook has a monopoly in online networking — a flabbergasting assertion given Facebook’s firm grip over consumers, their data, and the social media market. If that isn’t an open-and-shut case for updating our antitrust laws so that we can stand up to Big Tech, I don’t know what is.”