A US District Court dismissed a Federal Trade Commission complaint against Facebook on Monday. This was a major blow to the Federal Government's antitrust case against Facebook. The lawsuit was filed late last year and sought to end Facebook's acquisitions of Instagram, WhatsApp, and other social media platforms. A separate case was also dismissed by the judge by a group state attorneys general.The FTC had initially filed a complaint alleging that Facebook purchased a competitor in the social media marketplace. Judge James E. Boasberg dismissed the complaint Monday. He stated that there was not enough evidence to support the FTC's central claim that Facebook has monopoly power.This case is not typical or intuitive.Boasberg stated that the FTC failed to present enough facts to support all its Section 2 claims, namely that Facebook holds a monopoly in the market for Personal Social Networking Services (PSN). Except for the plain allegation that Facebook still holds a dominant market share (exceeding 60%), the complaint does not contain any information on this point.Boasberg also rejected claims against Facebook's interoperability limitations, finding that they were too old to be subject to FTC enforcement.The Verge reached out to Facebook for comment but they did not respond immediately. The company's stock rose in reaction to the dismissal and reached $1 trillion in market capitalization, which is the highest level in Facebook history.A parallel anti-monopoly lawsuit against Facebook that was filed by a group of state attorneys general was also dismissed in the ruling. In December, nearly all the state attorneys general joined a lawsuit against Facebook. It made similar claims to the FTC case. Boasberg, however, dismissed the case in an accompanying ruling on Monday. He ruled that a specific civil doctrine prohibited the coalition from challenging previous acquisitions that had been settled over many years.Judge Boasberg allowed the FTC to reconsider its case and unwind previous Facebook mergers. The FTC has until July 29th, to file a new complaint arguing about Facebook's market dominance. Judge Boasberg clarified that the FTCs case wasn't affected by civil doctrine that sank the state attorneys general.Boasberg explained that an injunction under Section 13 (b) is theoretically possible in a Section 2 challenge of long-ago merges. However, the FTC opinion states that the injunction is only available if the defendant still has the stock or purchased assets, as it is here.Boasberg also pointed out the difficulty in establishing monopoly power to provide a free online service. This is what the FTC is required to do. Boasberg's opinion states that this case does not involve an intuitive or ordinary market. PSN [Personal Social Networking] is free to use. The exact boundaries of what constitutes a PSN (Personal Social Networking) service, i.e. which features of a company's mobile app or website, are not clear.As Congress is pushing for sweeping antitrust reforms in tech, the dismissal by the courts could lead to more aggressive legislative action. The House Judiciary Committee approved last week a list of bills that target Big Techs market power. These include bans on large mergers as well as new interoperability requirements. The House has approved all six bills and additional bills will be introduced in the Senate in the coming weeks.The FTC's decision in today's Facebook case against Facebook is a clear indication that antitrust reforms are urgently needed. Rep. Ken Buck (R.CO), ranking member of the House Judiciary Committees antitrust committee, tweeted Monday. Our antitrust enforcers need additional resources and tools to pursue Big Tech companies that engage in anticompetitive conduct.
