Big tech companies have been in the spotlight of antitrust regulators for years now, but the past 12 months have seen a slew of new cases having been opened up and leveled against these enterprises. The usually big tech names all have their fair share of antitrust cases pending, with Facebook (NASDAQ: FB) being just one of many. However, despite growing scrutiny against the social media giant, one judge ended up dismissing a major antitrust case in a surprising ruling.
U.S. District Judge James Boasberg from Washington ruled on Monday that Facebook’s request to dismiss the lawsuit filed by the Federal Trade Commission (FTC) was justified. Over 46 states brought the case to court, mainly on grounds that the attorney general has waited too long to bring a case to trial.
The judge said the case was legally insufficient because it didn’t plead enough allegations that support the FTC’s claim of a monopoly against Facebook. Despite this, however, the Judge said the FTC would be able to file an amended lawsuit within 30 days if it wished, meaning this case might not be over just yet.
“This really stings for the agencies. The FTC and the states I’m sure used the best talent they had to bring these cases, and they have been knocked out at the earliest stage,” said former FTC chairman William Kovacic in a statement on the ruling. “This adds complexity and delay to a case that was already going to be difficult.”
For most people, it seemed as if regulators all over the world were getting the upper hand on big tech, especially since it seems to be one of the few issues with growing bipartisan support in this current political climate.
However, while antitrust concerns have been growing among regulators for years, filing cases against companies that offer non-traditional services, especially in the tech and social media sector, has proven more difficult to prove to courts. The main argument is that Facebook has been buying up potential rivals, like WhatsApp and Instagram, instead of directly competing with them.
Facebook ended up jumping on the news, with shares rising around 4.2% following the surprise announcement. Most people following the case weren’t expecting Facebook to win such an early victory, even if it doesn’t mean the case is over yet.
Facebook Company Profile
Facebook is the world’s largest online social network, with 2.5 billion monthly active users. Users engage with each other in different ways, exchanging messages and sharing news events, photos, and videos. On the video side, the firm is in the process of building a library of premium content and monetizing it via ads or subscription revenue. Facebook refers to this as Facebook Watch. The firm’s ecosystem consists mainly of the Facebook app, Instagram, Messenger, WhatsApp, and many features surrounding these products. Users can access Facebook on mobile devices and desktops. Advertising revenue represents more than 90% of the firm’s total revenue, with 50% coming from the U.S. and Canada and 25% from Europe. With gross margins above 80%, Facebook operates at a 30%-plus margin. – Warrior Trading News
