Facebook hits $1 trillion value for first time after key legal victory that helps drive a renewed tech stock rally
(AF) A US judge dismissed federal and state antitrust complaints against Facebook on Monday June 28, dealing a major blow to government moves to rein in the power of Big Tech in the country.
Attempts to force the social media giant to sell Instagram and WhatsApp were rejected at an early stage in the legal process.
This helped Facebook shares to rise more than 4% in late trading and took its capitalization over $1 trillion for the first time.
The news came as other Big Tech stocks in the US were also performing strongly, with rises in Amazon and Apple helping both the S&P and Nasdaq indices to close at fresh record highs on Monday.
Asian technology giants such as Alibaba and Tencent face completely different regulatory challenges in China to their US counterparts and cannot expect helpful intervention from independent courts.
But a renewed appetite for Big Tech shares in the US is likely to have a spillover effect on major technology stocks elsewhere in the world.
The US legal dismissal was the first big blow to state and federal lawsuits against Big Tech firms seeking to rein in alleged abuses of their massive market power.
Judge James Boasberg of the US District Court for the District of Columbia said the Federal Trade Commission (FTC) failed to show that Facebook had monopoly power in the social networking market, but said the agency could file a new complaint by July 29.
Judge slams lawsuit
The ruling was harshly critical of the legal case made by the agency.
“The FTC’s complaint says almost nothing concrete about how much power Facebook had, and still has, in a properly defined antitrust market. It is almost as though the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist,” the decision said.
Boasberg also dismissed a lawsuit by multiple US states, saying they waited too long to challenge the acquisitions of Instagram and WhatsApp in 2012 and 2014 respectively. The judge did not invite the states to refile their complaint.
The New York Attorney General’s office said it was “considering our legal options.”
Facebook had asked for the lawsuits to be dismissed.
The judge wrote: “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.”
A Facebook spokesperson said: “We are pleased that today’s decisions recognize the defects in the government complaints filed against Facebook.”
An FTC spokesperson said the agency was “closely reviewing the opinion and assessing the best option forward.”
The judge’s said that the FTC was “on firmer ground in scrutinizing the acquisitions of Instagram and WhatsApp, as the court rejects Facebook’s argument that the FTC lacks authority to seek injunctive relief against those purchases.”
The FTC and a 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 $1 billion and WhatsApp for $19 billion.
The federal government and states filed a total of five lawsuits against Facebook and Alphabet’s Google last year following bipartisan outrage over their social media clout in the economy and the political sphere.
The judge also criticized portions of the FTC’s case regarding Facebook’s refusal to allow interoperability permissions with competing apps.
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