Facebook hits $1 trillion market cap after federal court dismisses FTC antitrust complaint

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CNN 28 June, 2021 - 04:55pm 34 views

A federal court on Monday dismissed the Federal Trade Commission's antitrust complaint against Facebook, as well as a parallel case brought by 48 state attorneys general, dealing a major setback for the agency's complaint that could have resulted in Facebook divesting Instagram and WhatsApp.

Shares of Facebook rose more than 4% on Monday following the rulings, sending the social media company's market capitalization above $1 trillion for the first time.

"We are pleased that today's decisions recognize the defects in the government complaints against Facebook," the company said in a statement. "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."

The FTC sued the company last December, alongside attorneys general from 48 states, arguing that Facebook engaged engaged in a systematic strategy to eliminate threats to its monopoly, including the 2012 and 2014 acquisitions of Instagram and WhatsApp, respectively, which the FTC previously cleared. 

However, the court ruled Monday said the FTC failed to prove its main contention, and the cornerstone of the case: That Facebook holds monopoly power in the U.S. personal social networking 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," reads the filing from U.S. District Court for the District of Columbia. "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."

The court found the FTC did not provide enough detailed data to prove Facebook has market power in the loosely defined market for personal social networking services.

"The Complaint is undoubtedly light on specific factual allegations regarding consumer-switching preferences," the court wrote. "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."

Elsewhere, the filing notes that the FTC's complaint seemed to assume that the court would agree 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 filing reads. "It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist."

The ruling is not necessarily the end of the case. The court acknowledged that the FTC may be able to cure the weaknesses in its argument so left open the possibility that it could file an amended complaint and continue the litigation.

The court also disagreed with Facebook's argument that the FTC does not have the power to attack the acquisitions of Instagram and WhatsApp, which took place in 2012 and 2014. On the contrary, it ruled that the FTC can still seek divestiture of these acquisitions -- but only if it succeeds in its legal arguments about Facebook's monopoly power.

However, the court completely dismissed the parallel case from the state attorneys general, saying that the long delay between the acquisitions and the 2020 case filing were unprecedented on a state level, and that the states' argument about "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."

"We are reviewing this decision and considering our legal options," a spokesman for the office of New York Attorney General Letitia James said.

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Government Antitrust Lawsuits Against Facebook Thrown Out by Federal Judge

The Wall Street Journal 28 June, 2021 - 05:00pm

U.S. District Judge James Boasberg in Washington granted the social-media giant’s requests to dismiss lawsuits filed by the Federal Trade Commission and state attorneys general in December.

Judge Boasberg said the FTC’s lawsuit was “legally insufficient” because it didn’t plead enough allegations to support monopolization claims against Facebook. The judge, however, said the commission can try again and gave it 30 days to attempt to file an amended lawsuit.

The judge dismissed the states’ case in its entirety, largely on the grounds that the attorneys general waited too long to bring their claims.

Representatives for Facebook, the FTC and the states didn’t immediately respond to requests for comment.

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District court dismisses FTC lawsuit against Facebook

CNBC Television 28 June, 2021 - 05:00pm

Facebook Antitrust Cases Brought By FTC and States Are Thrown Out

The New York Times 28 June, 2021 - 05:00pm

The judge, James E. Boasberg, said that the Federal Trade Commission’s complaint lacked facts, and that the agency needed to refile it within 30 days.

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

The judge, James E. Boasberg for the U.S. District Court for the District of Columbia, said the case from the states needed to be dismissed because too much time had elapsed since the alleged offenses took place. The states, led by Letitia James, the New York attorney general, accused Facebook in December of buying up nascent competitors like Instagram and WhatsApp — deals made in 2012 and 2014 — to cement its monopoly over social networking.

In a separate, 53-page opinion, he said the complaint by the Federal Trade Commission, also filed in December, failed to provide enough facts to back its claims that Facebook had a monopoly over personal social networking.

The judge said that the F.T.C. had 30 days to refile its complaint.

“This really stings,” said William E. Kovacich, a former chairman of the agency. “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 the New York attorney general did not immediately have comments.

Christopher Sgro, a spokesman for Facebook, 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.”

The news pushed Facebook’s stock up 4.2 percent, and the company passed $1 trillion in market capitalization, a first for the social network and one of only half a dozen companies to reach such a valuation.

The decision was a major blow to bipartisan attempts in Washington to rein in Big Tech. President Biden has installed critics of the technology giants in key regulatory roles, including Lina Khan as chair of the F.T.C., and he is expected to issue broad mandates this week for federal agencies to address corporate concentration across the economy. Ms. Khan’s first major task as chair will be to rewrite the lawsuit to address the judge’s criticisms.

In Congress, legislators pointed to the decisions as proof that century-old antitrust laws needed updating for the internet sector. Courts have narrowed interpretations of antitrust laws over the years, making government cases difficult to win. Last week, the House Judiciary Committee advanced six bills that would overhaul antitrust laws, with the goal of loosening the grips that Amazon, Apple, Facebook and Google have over wide swaths of the economy.

“Today’s development in the F.T.C.’s case against Facebook shows that antitrust reform is urgently needed,” said Representative Ken Buck, a Republican from Colorado and a co-sponsor of the antitrust bills. “Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct.”

Republican Senator Josh Hawley of Missouri, a critic of Big Tech, said on Twitter that the court had acknowledged Facebook’s “massive market power but essentially shrugged its shoulders.”

The decision was also a disappointment for the growing cohort of activists who have pushed regulators to move to break up the biggest tech companies. Sarah Miller, the executive director of the antitrust think tank the American Economic Liberties Project, said she hoped the states would appeal the dismissal and the F.T.C. would file its case again. But she said the judge’s ruling underscored the need for Congress to update the laws that police market concentration.

“The courts are going to need, ideally, some congressional guidance here, given that they have some outsized role in determining the outcomes of antitrust cases,” she said. “Sometimes losses can be good because it can just reinforce that necessity, and we’re hoping that this will serve to do that.”

This is a developing story. Check back for updates.

Facebook Gets Reprieve As Court Throws Out Major Antitrust Complaints

NPR 28 June, 2021 - 03:21pm

A federal judge has dismissed two blockbuster antitrust complaints against Facebook, in a setback to federal and state prosecutors who were pushing for a break-up of the social media giant.

But Judge James Boasberg of the U.S. District Court for the District of Columbia said in Monday's ruling that prosecutors failed to prove Facebook has a monopoly in social networking.

However, the judge dismissed the complaints "without prejudice," meaning the plaintiffs can file new complaints against the company.

Judge Boasberg gave the FTC 30 days to refile its complaint. He said the agency needs to explain how it concluded that Facebook has a market share of at least 60%.

"In this unusual context, the FTC's inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook's market share renders its vague '60%-plus' assertion too speculative and conclusory to go forward," he wrote.

In dismissing the states' case, Judge Boasberg said the attorneys general had waited too long to challenge Facebook's purchases of Instagram in 2012 and WhatsApp in 2014.

He referenced "the doctrine of laches, which precludes relief for those who sleep on their rights," writing: "The Court is aware of no case, and Plaintiffs provide none, where such a long delay in seeking such a consequential remedy has been countenanced in a case brought by a plaintiff other than the federal government."

Facebook shares rose more than 4% after the district court's rulings on Monday, sending its market cap past $1 trillion for the first time.

"We are pleased that today's decisions recognize the defects in the government complaints filed against Facebook," said Facebook spokesperson Christopher Sgro. "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."

"Today's development in the FTC's case against Facebook shows that antitrust reform is urgently needed," tweeted Rep. Ken Buck, R-Colo., the ranking Republican on the House Judiciary antitrust subcommittee. "Congress needs to provide additional tools and resources to our antitrust enforcers to go after Big Tech companies engaging in anticompetitive conduct."

The FTC and the office of the New York attorney general, which is leading the states' case, said they are reviewing the decisions and considering their options.

Editor's note: Facebook is among NPR's financial supporters.

Facebook's market value surpasses $1 trillion for the first time

Axios 28 June, 2021 - 02:47pm

Why it matters: Despite a record level of regulatory scrutiny, Facebook's value continues to soar. The company has experienced enormous growth over the past year, as more people turned to its services to communicate and shop during the pandemic.

The big picture: Facebook joins just a small handful of other companies that have recently joined the $1 trillion club. Apple, Alphabet, Microsoft and Amazon have surpassed $1 trillion in market value in the past few years.

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The extraordinary heat wave that's stifling the Pacific Northwest will peak in many areas on Monday, with Seattle forecast to smash its all-time high-temperature record by about 7°F, an almost unheard-of margin for an all-time record, which is usually eclipsed by fractions of a degree.

Why it matters: After two days of oppressive heat and little relief at night, the extreme weather event, boosted by global warming, is moving into a more dangerous phase.

California has banned state-funded travel to five more states because of laws that discriminate against the LGBTQ community, Attorney General Rob Bonta announced Monday, bringing the total number of banned states to 17.

Why it matters: The move comes as Republicans in at least 25 states have introduced legislation targeting trans people this year.

For all the talk of "Fortnite" and its so-called metaverse of character crossovers, it is Nintendo and its "Smash Bros." fighting game series that has created the industry's biggest team of rivals.

The big picture: For "Smash," Nintendo flexes its strength as a successful video game company to rope in collaborators and occasional competitors in the service of making its own $60 game increasingly successful.

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