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Facebook’s valuation soared above $1 trillion for the first time on Monday after a federal judge tossed a series of antitrust complaints against the social networking giant.
Investors sent shares of Facebook up close to 5 percent after Washington DC federal judge James E. Boasberg tossed a Federal Trade Commission complaint accusing the company of “illegal monopolization” resulting from “a years-long course of anticompetitive conduct.”
Boasberg also dismissed a parallel suit against Facebook from 46 states, including New York, that also accused the company of squashing competition through anti-competitive practices.
The lawsuits, which were filed simultaneously in December, could have resulted in Facebook being forced to separate or sell Instagram and WhatsApp — acquisitions that critics say were done to neutralize a growing threat of competition from the apps.
In a major blow to regulators’ efforts to crack down on the Silicon Valley giant, Judge Boasberg slammed the FTC’s suit as “vague” and “too speculative” in an opinion published Monday afternoon.
“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,” wrote Boasberg.
He gave the FTC one month to file an amended compliant in order for the suit to proceed. But he did not give the states an opportunity to file an amended suit, dismissing their case outright, ruling that they waited too long to file their claims.
Both the FTC and New York Attorney General Tish James’ office said they are reviewing the decision and assessing their options.
Facebook in a statement 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.”
Facebook stock ended the day higher 4.18 percent, or $14.27 a share, to $355.64, giving it a market capitalization of slightly more than $1 billion.
The development represents an early challenge for FTC chair and big tech foe Lina Khan, who was sworn in less than two weeks ago. The agency will likely take Boasberg up on his offer and file a new complaint by July 28, said Herbert Hovenkamp, an antitrust expert and University of Pennsylvania law professor.
“They can start from scratch and do whatever they want to do,” Hovenkamp told The Post. “This complaint is gone.”
The professor also said he found the judge’s move of dismissing the complaint but not the entire case unusual.
“The judge may have thought that there was something to the case but that the complaint was not very well drafted to state it,” Hovenkamp said.
In the FTC’s initial complaint, the agency claimed that Facebook controlled “60 percent-plus” of the social media market. But Boasberg said the agency failed to provide any indication of the metric or method used to calculate that figure.
He also said that Facebook’s large market share alone was insufficient evidence of a monopoly.
“To merely allege that a defendant firm has somewhere over 60 percent share of an unusual, nonintuitive product market — the confines of which are only somewhat fleshed out and the players within which remain almost entirely unspecified — is not enough,” Boasberg wrote.
While Facebook will certainly breathe a sigh of relief at Monday’s dismissal, the company is not out of the regulatory woods yet. Congress is currently weighing several bills that could break up Facebook and other big tech companies, while a Texas judge ruled Friday that Facebook must face a suit in state court for allegedly knowingly profiting off of sex trafficking.
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