Facebook received a massive boost, closing a record $1 trillion in market capitalization on Monday after a federal court junked a U.S. Federal Trade Commission anti-trust complaint against the social media giant, CNBC reported.
Facebook Stocks Close 4.2% Higher After Court Case Dismissal
Facebook stocks soared 4.2 percent higher--closing at $355.64--after Judge James Boasberg of the U.S. District Court for the District of Columbia threw out the anti-trust complaint. It is after prosecutors failed to prove Facebook's alleged monopoly in the social networking space, his ruling stated.
FB is the fifth US company to reach the $1 trillion market cap after Apple, Microsoft, Amazon and Alphabet (the parent company of Google).
The Federal Trade Commission and 48 state attorneys general accused Facebook of stifling and eliminating competition by devouring rivals, such as WhatsApp and Instagram, and leaving would-be competitors out of the running by cutting access to their data and systems, a report from NPR said.
Judge Boasberg, however, dismissed the FTC complaints "without prejudice," which means the complainants can file a new case against Facebook. As such, the judge gave the FTC 30 days to refile its complaint and explain further how it reached its conclusion that Facebook has a market share of more than 60 percent.
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The FTC and the New York attorney general, who led in filing the states' complaint, said they would evaluate the court decisions and consider their options.
Facebook takes most of its earnings from personalized advertisements that appear to users of Facebook and Instagram. It also has an emerging hardware business, developing such products as the Portal video calling device, Oculus virtual reality headsets and smart glasses set to unveil later this year, CNBC noted.
The Menlo Park, California-based company had its initial public offering in May 2012, starting with a market capitalization of $104 billion.
The FTC's inability to show "metric(s) or method(s) it used to calculate Facebook's market" in pegging Facebook's market share as "60 percent plus" makes the assertion "too speculative and conclusory to go forward," Judge Boasberg added.
He said the agency and the attorneys general waited too long to oppose Facebook's purchases of Instagram in 2012 and WhatsApp in 2014, the Wall Street Journal noted.
Facebook 'Pleased' With Court Decision, Insists Competing 'Fairly'
The federal court ruling serves as a reprieve for Facebook, which has been a constant target of bipartisan political and regulatory bodies over chargers that they have unlawfully monopolized the market.
Facebook spokesperson Christopher Sgro said in the NPR report that the company is "pleased" with Judge Boasberg's decision, which recognized the "defects in the government complaints filed against Facebook." Sgro said Facebook "compete(s) fairly every day to earn people's time and attention," and added that it will stay committed to "deliver great products" for its users.
But politicians going after big tech companies are not perturbed. They are calling for an overhaul to U.S. competition laws that would strengthen anti-monopoly enforcement by government agencies. A U.S. Republican from Colorado, Rep. Ken Buck, emphasized that the Congress should offer more tools and resources for the government agencies to go after tech giants engaging in monopolistic practices.
