US court dismisses charges over Facebook monopoly

A US court has dismissed the Federal Trade Commission’s first antitrust complaint against Facebook. The market watchdog is given one month to submit a new complaint. A second case of US states has been completely dismissed.

Federal Judge James Boasberg calls the antitrust complaint against Facebook ‘legally insufficient’. The FTC indictment alleged that Facebook has an illegal monopoly and aimed, among other things, at reversing Facebook’s acquisitions of competitors such as Instagram and WhatsApp.

The judge writes, among other things, that the FTC has not submitted sufficient evidence that Facebook has monopoly power. “While the Court does not agree with all of Facebook’s assertions, it ultimately finds that the FTC’s complaint is legally inadequate and should therefore be dismissed,” Boasberg said.

“In that regard, the complaint contains nothing more than the bare-bones claim that the company had and still has a ‘dominant market share of more than 60 percent’,” the court wrote. “Such an unsubstantiated claim could barely suffice in an antitrust case involving a more traditional commodity market.” But according to the judge, ‘this lawsuit is not about an ordinary market’, because it concerns a ‘personal social network service’.

“Such services are free to use and it is hardly clear what exactly constitutes such a service. In this unusual context, the FTC’s inability to indicate to any degree what measures or methods it has used to measure market share Facebook, in addition to its vague ’60 percent plus’ claim, makes the complaint too speculative and conclusive to proceed.”

The court does state that it is not dismissing the entire antitrust case, but only the first complaint. That allows the FTC to file an amended complaint. The market watchdog has until July 29 to file such a complaint in the US court, in which the FTC must clarify how it came to the conclusion that Facebook has an illegal monopoly position.

Boasberg also dismissed a related antitrust case brought by 48 U.S. Attorneys General. That antitrust case also aimed to undo Facebook’s acquisitions of Instagram and WhatsApp. The attorneys general argued that Facebook had engaged in anti-competitive behavior by acquiring competitors, also citing Facebook’s dealings with other competitors, such as Snapchat. However, the court argues that too much time has passed for that case to continue.

A spokesperson for Facebook lets in a statement know that the company is happy with the decision. The company stated earlier this year that the FTC had not provided sufficient evidence for a possible monopoly position of the company and therefore filed motions to dismiss the entire antitrust case.