NEWS30 June 2021

Facebook antitrust case dismissed by US court

Legal News North America

US – A US court has thrown out a federal antitrust case against Facebook that threatened to break up the company’s portfolio of social media apps.

Person holding phone with Facebook login screen

The US District Court of the District of Columbia ruled against the Federal Trade Commission (FTC) earlier this week after determining that the FTC had failed to demonstrate that Facebook was a monopoly.

Facebook is the world’s largest social media company, and owns brands such as Instagram and WhatsApp as well as its eponymous social platform.

The FTC and a number of US states had brought the case against Facebook in December 2020, and defeat for the social media company could have required Facebook to divest assets including Instagram and WhatsApp.

A permanent injunction could also have required Facebook to seek prior notice and approval for any future mergers and acquisitions.

District judge James Boasberg said in his ruling that the FTC had failed to present enough facts to show Facebook controlled 60% or more of the social media market, and dismissed the antitrust case on those grounds.

“The complaint contains nothing on that score save the naked allegation that the company has had and still has a “dominant share of that market (in excess of 60%),” Boasberg’s ruling stated.

“Such an unsupported assertion might (barely) suffice in a Section 2 case involving a more traditional goods market, in which the court could reasonably infer that market share was measured by revenue, units sold, or some other typical metric.

“But this case involves no ordinary or intuitive market. Rather, personal social networking (PSN) services are free to use, and the exact metes and bounds of what even constitutes a PSN service — i.e., which features of a company’s mobile app or website are included in that definition and which are excluded — are hardly crystal clear.”

Boasberg also ruled that the FTC’s challenge to Facebook’s policy of refusing interoperability permissions with competing apps “fails to state a claim for injunctive relief”.

This meant that Facebook’s motion to dismiss the complaint was accepted, although the court also granted leave to amend and resubmit the complaint within 30 days.

A Facebook spokesperson said: “We are pleased that the court’s decisions recognise 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.”