WASHINGTON – In a staggering setback to regulators’ efforts to disband Facebook, a federal judge on Monday dismissed antitrust lawsuits by the Federal Trade Commission and more than 40 states against the company.
Judge James E. Boasberg of the US District Court for the District of Columbia said the case should be closed by the states because too much time had passed since the alleged crimes. The states, led by New York attorney general Letitia James, accused Facebook in December of buying up emerging competitors like Instagram and WhatsApp – deals from 2012 and 2014 – to consolidate its monopoly over social networks.
In a separate 53-page statement, he said the Federal Trade Commission’s December complaint did not provide enough evidence to support its claims that Facebook had a monopoly on personal social networks.
The judge said the FTC had 30 days to re-file its complaint.
“This really sticks,” said William E. Kovacich, a former chairman of the agency. “This is a reminder to those who have wanted a dramatic, comprehensive litigation campaign against Big Tech, that it won’t be easy because the courts have a different view of the cartel system.”
Representatives from the FTC and the New York attorney general did not speak out immediately.
Christopher Sgro, a spokesman for Facebook, said, “We are pleased that today’s decisions recognize the shortcomings of government complaints filed against Facebook. We compete fairly every day to win people’s time and attention, and we will continue to deliver great products to the people and businesses who use our services. “
The news sent Facebook stock up 4.2 percent, and the company passed a market cap of $ 1 trillion, a first for the social network and one of only half a dozen companies to achieve such a rating.
The decision was a severe blow to bipartisan attempts in Washington to contain big tech. President Biden has installed critics of the tech giants in key regulatory roles, including Lina Khan as chair of the FTC, and is expected to issue broad mandates for federal agencies this week to address corporate concentration across the economy. Ms. Khan’s first major task as Chairperson will be to rewrite the lawsuit to address the judge’s criticism.
In Congress, lawmakers cited the decisions as evidence that centuries-old antitrust laws needed to be updated for the Internet sector. Courts have restricted the interpretation of antitrust laws over the years, making it difficult to win government cases. Last week, the House of Representatives Judiciary Committee tabled six bills designed to revise antitrust law with the aim of loosening control of much of the economy from Amazon, Apple, Facebook and Google.
“Today’s development in the FTC’s case against Facebook shows that antitrust reform is urgently needed,” said MP Ken Buck, a Republican from Colorado and co-sponsor of the antitrust laws. “Congress needs to provide our antitrust authorities with additional tools and resources to prosecute big tech companies that are anticompetitive.”
Republican Senator Josh Hawley of Missouri, a critic of Big Tech, said on Twitter that the court had “recognized Facebook’s massive market power but essentially shrugged.”
The decision also disappointed the growing cohort of activists who have pushed regulators to disband the largest tech companies. Sarah Miller, the executive director of the antitrust think tank American Economic Liberties Project, said she hoped states would appeal the dismissal and the FTC would resubmit her case. But she said the judge’s ruling underscored the need for Congress to update the laws that monitor market concentration.
“The courts will ideally need guidance from Congress here as they play an overwhelming role in determining the outcome of antitrust proceedings,” she said. “Sometimes losses can be good because they can only add to that need, and we hope that serves to do so.”
This is a developing story. Check back for updates.
David McCabe contributed to the coverage.