Facebook market cap passes $1.34 trillion after antitrust dismissal

WASHINGTON • Facebook on Monday closed above US$1 trillion (S$1.34 trillion) in market capitalisation for the first time after a United States judge dismissed the blockbuster antitrust action against the social media giant filed last year by federal and state regulators.

Facebook shares gained 4.2 per cent to US$355.64 at the close in New York, the biggest single-day increase since April 29. The stock has jumped 30 per cent this year.

US District Judge James Boasberg granted the company's request to dismiss the complaints filed last year by the US Federal Trade Commission (FTC) and state attorneys-general led by New York, saying that the FTC failed to meet the burden for establishing that Facebook has a monopoly in social networking.

The judge faulted the FTC for failing to detail how Facebook has monopoly power in a market the agency described as personal social networking.

The agency's claim that Facebook has in excess of 60 per cent of a vaguely defined market is "too speculative and conclusory to go forward", the judge wrote in the ruling. He said the agency could refile the complaint within 30 days.

"The FTC's complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market," Judge Boasberg said. "It is almost as if the agency expects the court to simply nod to the conventional wisdom that Facebook is a monopolist."

A Facebook spokesman said: "We are pleased that today's decisions recognise the defects in the government complaints filed against Facebook."

With the ruling, Facebook has escaped - for now - the most significant regulatory threat to its business to emerge from the crackdown on US technology giants.

Both the FTC and New York Attorney-General's Office said they were reviewing the decision and considering their legal options.

The ruling delivers a blow to the FTC and the states, which claimed that Facebook violated antitrust laws by buying photo-sharing app Instagram in 2012 and messaging service WhatsApp in 2014 to cut off emerging competitive threats.

It also puts new emphasis on antitrust legislation advanced by the House Judiciary Committee last week that would make it easier for enforcers to challenge anti-competitive conduct by the biggest tech platforms.

Judge Boasberg's decision to toss out the Facebook complaints shows the hurdles US antitrust enforcers face in trying to take on the Internet giants. Officials on their own cannot break up companies or impose other remedies, but must persuade judges to take action. The process can take years.

In a separate opinion about the states' lawsuit, the judge criticised the attorneys-general for waiting years after the Instagram and WhatsApp deals to challenge the acquisitions.

"The states' long delays were unreasonable and unjustified as a matter of law," he said. "Both acquisitions were, per plaintiffs' allegations... publicly announced, and the states were thus aware or certainly should have been aware of them from those points onward."

The Facebook lawsuits were filed last December as part of a crackdown on America's tech giants. The cases followed a Justice Department complaint against Google parent Alphabet for allegedly monopolising Internet search, and the findings of a House investigation that accused tech companies of abusing their dominance. Lawmakers have since proposed Bills that would cast a broad regulatory net over the companies.

Antitrust investigators at the Justice Department have stepped up scrutiny of Google's digital advertising market practices in recent months, according to sources familiar with the matter, showing that President Joe Biden's administration is actively pursuing a probe that started under former president Donald Trump.

BLOOMBERG