Concern for Mark Zuckerberg – Facebook’s Rise to $1 Trillion Needs an Asterisk
The dismissal of government antitrust complaints against Facebook sparked stock gains, but the decision is likely only a temporary reprieve. A breakup is still on the table.
Investors in Facebook Inc. celebrated the social media giant’s legal victory in two major antitrust lawsuits on Monday by pushing the company’s market value above $1 trillion for the first time. But a closer look at the judge’s decision reveals that it could simply delay the eventual judgment. This is not an “all-clear” decision.
U.S. District Judge James Boasberg has granted Facebook’s request to dismiss lawsuits filed last December by the Federal Trade Commission and a group of state attorneys general, who accuse the company of violating antitrust and antitrust laws. leveraging its power in the social media market to stifle innovation and crush emerging competitors. The FTC has sought legal action to reverse Facebook’s past acquisitions, including Instagram and WhatsApp, and restrain future anticompetitive behavior. In Monday’s notice, Boasberg said the government had failed to provide the facts or evidence necessary to support its claim that Facebook had a monopoly share of more than 60% in the social media market. Boasberg gave regulators the option to refile an amended case within 30 days.
This looks more like a technical detail than a real dismissal of complaints. It is highly likely that the FTC will file its lawsuit again with the required data and evidence. Given that Facebook’s services reach nearly 3 billion users every month, it shouldn’t be difficult for the agency to find the required backup. And with antitrust expert Lina Khan heading the FTC, it’s also likely that any further legal action will be great.
Notably, the government’s main claim that Facebook’s “buy or bury” strategy, particularly its purchases of Instagram and WhatsApp, was stifling emerging competitive threats went unchallenged. The FTC “is on firmer ground to review the acquisitions of Instagram and WhatsApp, as the Court rejects Facebook’s argument that the FTC lacks the authority to seek an injunction against these purchases,” wrote the judge.
In the end, it will likely only be a few weeks delay in the government’s case against Facebook. The remedies sought by the FTC – including a possible breakup of the social media giant – are still on the table.