A U.S. judge on Monday dismissed federal and state antitrust complaints against Facebook Inc that sought to force the social media company to sell Instagram and WhatsApp, saying the federal complaint was “legally insufficient.”
Facebook shares rose more than 4 per cent after the ruling. The share price rise put Facebook’s market capitalization over US$1 trillion for the first time.
The ruling was the first major blow to state and federal lawsuits against big tech companies last year, which seek to curb alleged abuses of their massive market power.
Judge James Boasberg of the District Court for the District of Columbia said the US Federal Trade Commission had failed to show that Facebook had a monopoly in the social networking market, but the FTC could file a new complaint by July 29.
He also rejected a lawsuit by several states, saying that they waited too long to challenge the acquisitions of Instagram and WhatsApp in 2012 and 2014, respectively, and the judge did not invite states to resubmit their complaints.
At the time, a spokesman for the New York Attorney General’s office said it was “considering our legal options.”
Facebook asked to dismiss lawsuits
Regarding the FTC’s lawsuit, the judge wrote, “While the court does not agree with all of Facebook’s claims here, it ultimately agrees that the agency’s complaint is legally insufficient and should therefore be dismissed.”
“We are pleased that today’s decisions acknowledge the flaws in the government complaints” filed against the company, a Facebook spokesperson said.
A spokesperson for the FTC said the agency was “closely reviewing the opinion and assessing the best option going forward.”
The FTC’s bright spot in the opinion was the judge’s saying that the agency was “on solid ground in scrutinizing the Instagram and WhatsApp acquisitions, with the court rejecting Facebook’s argument that the FTC lacks the authority to seek judicial remedy against these purchases.”
The FTC and a big group of states filed separate lawsuits last year that accused Facebook of breaking antitrust law to keep smaller competitors at bay by snapping up rivals, such as Instagram for US$1 billion and WhatsApp for US$19 billion.