FTC’s antitrust complaint against Facebook dismissed by federal court

Facebook has been under political pressure to spin off its photo service instagram and messaging app WhatsApp.

Sarah Tew/CNET

A federal court on Monday dismissed the Federal Trade Commission’s antitrust lawsuit against Facebook that alleges the social media giant engaged in illegal anticompetitive practices to hold onto its monopoly power in social networking.

The lawsuit, filed by the FTC in 2020, accuses Facebook of engaging in tactics such as purchasing rivals rather than competing with them to squash its competition. As a result, consumers have fewer choices for social networking, allowing Facebook to benefit from gathering personal data from users, the lawsuit alleged. The dismissal of the lawsuit is a major setback for the FTC, but the case isn’t over because the agency will be allowed to file an amended complaint within 30 days.

In a legal document released Monday, a federal judge said the FTC hasn’t provided enough evidence that Facebook has a monopoly power in personal social networking. The judge noted social networking services are free and what’s considered a social network is “hardly crystal clear.”

The FTC didn’t immediately have a statement. 

The FTC’s lawsuit isn’t the only complaint against Facebook that a DC federal court dismissed Monday. US District judge James Boasberg also dismissed a similar lawsuit against Facebook filed by 48 attorneys general. He noted the states waited years to legally challenge Facebook’s acquisitions of photo service Instagram and messaging app WhatsApp, which were purchased in 2012 and 2014, respectively. Even though Facebook makes it tough for social media users to move their data to another service, the social media company’s practice isn’t illegal under antitrust law, the judge said. New York Attorney General Letitia James, who led the multistate lawsuit against Facebook, didn’t immediately respond to a request for comment.

A Facebook spokesperson praised the judge’s decision to dismiss both lawsuits. “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,” a Facebook spokesperson said in a statement.

Facebook has repeatedly pushed back against the idea that spinning off WhatsApp and Instagram would help solve its privacy and content moderation problems. The social network has been criticized for not doing enough to combat misinformation, hate speech and other offensive content along with failing to protect user privacy. The company has called actions to break up the company “revisionist history,” noting that the acquisitions of WhatsApp and Instagram were cleared by the FTC.

Efforts to rein in Facebook’s power hasn’t stopped the company from growing. On Monday, Facebook’s market capitalization hit $1 trillion for the first time.

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