US court dismisses Facebook monopoly charges

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

Federal Judge James Boasberg calls the antitrust suit against Facebook ‘legally insufficient’. The FTC’s 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 contentions, it ultimately finds that the FTC’s complaint is legally deficient and must therefore be dismissed,” Boasberg said.

“The complaint contains nothing on that point other than the bald claim that the company had and still has a ‘dominant market share of more than 60 percent’,” the court writes. “Such an unsubstantiated claim would hardly 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 networking service’.

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

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

Boasberg also has a related antitrust suit from 48 US Attorneys General rejected. That antitrust suit was also aimed at overturning Facebook’s acquisitions of Instagram and WhatsApp. The attorneys general argued that Facebook 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 Facebook spokesperson chimes in a statement know that the company is happy with the decision. The company itself 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.