Judge Throws Out Antitrust Cases Against Facebook

In a stunning setback to regulators’ efforts to break up Facebook, a federal judge on Monday threw out antitrust lawsuits brought against Facebook by the Federal Trade Commission and more than 40 states.

A federal judge said on Monday that prosecutors had failed to back up their claim that Facebook held a monopoly over social networking. The judge said one of the complaints, from the Federal Trade Commission, lacked facts and gave the agency 30 days to refile it

The decision was a major blow to attempts to rein in Big Tech.

The judge eviscerated one of the federal government’s core arguments, that Facebook holds a monopoly over social networking, saying prosecutors had failed to provide enough facts to back up that claim. And he said the states had waited too long to bring their case, which centers on deals made in 2012 and 2014.

The judge said the F.T.C. could try again within 30 days with more detail, but he suggested that the agency faced steep challenges.

In Congress, legislators pointed to the decisions as proof that century-old antitrust laws needed updating for the internet sector.

 “This really stings,” said William E. Kovacic, a former chairman of the Federal Trade Commission. “This is a reminder to those who have wanted a dramatic, sweeping litigation campaign to take on Big Tech that there’s nothing easy about it, because the courts have a different view of the antitrust system.”

Representatives for the F.T.C. and Letitia James, the New York attorney general, who led the states’ case, said they were reviewing the judge’s decision and considering their legal options.

Spokesperson for Facebook, Christopher Sgro said “We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook. 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.”

News of the turn of events has pushed Facebook’s stock up 4.2 per cent, in addition to that, the company passed US$1 trillion in market capitalization for the first time. It is one of only half a dozen companies to reach such a valuation.

US Congress, President Joe Biden and many states have made weakening the grip of Amazon, Apple, Facebook and Google a high priority and installed critics of the technology giants like Lina Khan, in key regulatory roles. As chair of the FTC, Ms Khan’s first major task as chair will be to rewrite the Facebook lawsuit to address the judge’s criticisms.

Last week, the House Judiciary Committee advanced six bills that would overhaul antitrust laws, with the goal of loosening the influence that the big companies have over wide swaths of the economy.