A federal judge has given Mark Zuckerberg and Facebook investors a trillion or so reasons to smile.
Judge James E. Boasberg on Monday tossed aside several antitrust cases brought by the FTC and state authorities, turning away the most concerted campaign yet to police the social network. The decision sent Facebook’s stock sharply higher, allowing the company to cross the $1 trillion threshold in market value for the first time. These rising shares were a boon for common shareholder and billionaire alike: The 4.1% in stock price during after-hours trading added $5.1 billion to Zuckerberg’s fortune.
Boasberg’s decision—and the stock movement—underscore the complexities about Facebook’s future. The social network has developed a wide swath of critics from both sides of the political spectrum and received a major black eye for its handling of user data.
Led by New York Attorney General Letitia James, some of the company’s opponents had hoped antitrust legal action might deliver what they’ve long craved: A blow to Facebook to reduce its ballooning scale and importance and deliver a measure of regulation. The antitrust case revolved around Facebook’s 2012 acquisition of Instagram and its WhatsApp purchase two years later.
But bringing Facebook to heel won’t be as easy as its detractors might’ve hoped. Boasberg dismissed the states’ case over timeliness, saying it too much time had elapased since those acquisitions. Meanwhile, Boasberg tossed out the FTC’s argument and argued in a 53-page opinion that regulators hadn’t produced enough facts to support their argument. The FTC could still tak
The other thing is: Despite a steady drum beat of negative news for much of the past four years, Facebook’s stock has been a winner. Its shares have doubled since March 2018, when the full ramifications of the Cambridge Analytic become public, igniting this new era in Facebook’s history. Over that period, the S&P 500 went up less than 60%—while Zuckerberg, his position at the company bolstered by the company’s increasing share prices, has watched his fortune go from less than $60 billion to nearly $100 billion.
I’m a senior editor at Forbes, where I cover social media, creators and internet culture. In the past, I’ve edited across Forbes magazine and Forbes.com.
An antitrust suit against Facebook by the FTC and several states had the wind taken out of its sails today by a federal judge, who ruled that the plaintiffs don’t provide enough evidence that the company exerts monopoly control over social media. The court was more receptive, however, to revisiting the acquisitions of Instagram and WhatsApp, and the case was left open for regulators to take another shot at it.
The court decision was in response to a Facebook motion to dismiss the suit. Judge James Boesberg of the D.C. circuit explained that the provided evidence of monopoly and antitrust violations was “too speculative and conclusory to go forward.” In a more ordinary industry, it might have sufficed, he admits, but “this case involves no ordinary or intuitive market.”
It was incumbent on the plaintiffs to back up their allegation of Facebook controlling 60 percent of the market with clear and voluminous data and a convincing delineation of what exactly that market comprises — and it failed to do so, wrote Boesberg. Therefore he dismissed the complaints in accordance with Facebook’s legal argument.
The company wrote in a statement that it is “pleased that today’s decisions recognize the defects in the government complaints.”
On the other hand, Boesberg is sensible that lack of evidence in the record does not mean that the evidence does not exist. So he his giving the FTC and states 30 days to amend their filing, after which the complaints will be reevaluated.