The antitrust push targeting Facebook hit a major hurdle on Monday when a federal court dismissed antitrust lawsuits that the Federal Trade Commission (FTC) and 48 states had brought against the tech giant.
The dismissal is a major victory for Facebook, which, along with Amazon, Apple and Google, has been facing increasingly scrutiny whether it engages in monopolistic behavior to stifle its competition. It is also a major setback for the growing bipartisan political movement in the United States to curb the power of Big Tech. And it indicates that the way forward for antitrust enforcement against these companies may require lawmakers to revisit existing U.S. antitrust law, which underwent its last major overhaul in the early 1900s – long before it began. Internet age.
The FTC’s lawsuit against Facebook argued that Facebook had engaged in monopolistic behavior against its competitors, but on Monday, the judge’s ruling said the FTC’s argument was not clear enough.
“The FTC has not pleaded enough facts to plausibly establish a necessary element of all of its Article 2 allegations, namely that Facebook has monopoly power in the market,” it read. a part of the United States District Court filing for the District of Columbia. The dossier then criticizes the FTC’s complaint against Facebook for containing “nothing on this point except the bare allegation” that the company has a dominant market share in the “personal social media” industry.
“It’s almost as if the agency [the FTC] expects the court to simply endorse the conventional wisdom that Facebook is a monopoly, ”says another part of the case.
The court also dismissed a parallel FTC complaint that had been filed by 48 state attorneys general in December. In dismissing the states complaint, the judge ruled that states had taken too long to challenge Facebook’s acquisition of Instagram and WhatsApp, which were acquired in 2012 and 2014, respectively.
Immediately after the court rulings, Facebook’s actions increased by more than 4 percent.
“We are pleased that today’s decisions recognize the flaws in the government’s complaints against Facebook,” a spokesperson for the Facebook company wrote in a statement. “We compete fairly every day for people’s time and attention and will continue to provide great products to the people and businesses who use our services. ”
An FTC spokesperson shared the following statement with Recode in response to the dismissal of the complaint:
“The FTC takes a close look at opinion and assesses the best option for the future.”
Facebook may be clear with the FTC for now, but the larger antitrust case against the company is far from over
Despite the court’s dismissal, the FTC’s case against Facebook is still not fully closed.
On the one hand, the court allows the FTC to submit a more detailed amended complaint against Facebook within 30 days, which it would reconsider.
And more broadly, the FTC and its new president, Lina Khan, which is well known for its scrutiny of Big Tech, may pursue other methods to limit the power of these giants. Beyond this existing case, the FTC could directly file a new case against Facebook within its own administration without needing to involve the federal court system. But as we have seen in the past, even record regulations between the FTC and Facebook didn’t have much impact on the way the company does business.
Some powerful politicians have viewed today’s decisions as a call for Congress to update old antitrust laws so that they can apply to modern technology companies.
Earlier this month, a bipartisan group of lawmakers led by Rep. David Cicillin (D-RI) and Rep. Ken Buck (R-CO) have introduced five antitrust bills intended to limit the economic power of big tech companies. These bills included several that would update antitrust laws to more specifically target tech companies.
Shortly after announcing the dismissal of the FTC’s complaint against Facebook, Representative Buck tweeted that the court’s dismissal of the FTC’s complaint was a reason antitrust laws needed updating.
Today’s developments in the FTC v Facebook case show that antitrust reform is urgently needed. Congress must provide additional tools and resources for our antitrust law enforcement officials to prosecute large tech companies engaging in anti-competitive behavior. https://t.co/AGvSacj8kb
– Representative Ken Buck (@RepKenBuck) June 28, 2021
“This undoubtedly intensifies the demand for legislative reform,” said Bill Kovacic, former FTC chairman under President George W. Bush. “This will be proof for the supporters of [antitrust law] reform that “That’s what you get by going to court.” ”
Senator Josh Hawley (R-MO), who is a vocal Republican critic of big tech companies, also tweeted his disappointment with today’s result.
So while the decisions may offer temporary relief to Facebook, it is only for now. Bigger challenges lie ahead – and the court’s opinions today could galvanize lawmakers to take a new approach to Big Tech’s antitrust enforcement.