A federal court judge dismissed the Federal Trade Commission’s antitrust complaint against Facebook on Monday.
The FTC and attorney generals from 48 states argued that Facebook deliberately sabotaged attempts to prevent a monopoly during the platform’s acquisition of Instagram in 2012 and WhatsApp in 2014. The FTC previously approved the acquisitions.
The court held that the FTC failed to meet its burden and prove that Facebook has a monopoly over the United States social media market.
“Although the Court does not agree with all of Facebook’s contentions here, it ultimately concurs that the agency’s Complaint is legally insufficient and must therefore be dismissed,” the U.S. District Court for the District of Columbia held. “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.”
Likewise, the court held that the FTC failed to provide sufficient proof that Facebook had market power over personal social media platforms.
“The Complaint is undoubtedly light on specific factual allegations regarding consumer-switching preferences,” the court said. “These allegations -- which do not even provide an estimated actual figure or range for Facebook’s market share at any point over the past ten years -- ultimately fall short of plausibly establishing that Facebook holds market power.”
The judge later criticized the FTC for assuming that the court would automatically that Facebook is a monopoly.
“The FTC’s Complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market,” the court continued. “It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.”
The case is not over, however. The court left open the possibility that the FTC could “cure” the defects in its argument and file an amended complaint in the future.
The court ruled that the FTC can still seek divestiture of Instagram and WhatsApp, but only if it succeeds in its argument that Facebook is a monopoly.
However, the court dismissed the case from the state attorneys general.
“Facebook preventing interoperability with competing apps fails to state a claim under current antitrust law, as there is nothing unlawful about having such a policy,” the court held.
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