Facebook has seen its valuation reach $1 trillion after a judge threw out the case against the social media company over alleged abuse over antitrust laws.
News of the ruling prompted Facebook shares to rise by four per cent, reaching $357.36, putting the company’s market capitalisation over $1 trillion for the first time.
The lawsuit was initially filed by the Federal Trade Commission (FTC) and 46 other states, accusing the social media platform of abusing antitrust laws by creating a monopoly by crushing its competition.
The FTC claimed that Facebook conducted “years-long course of anti-competitive conduct”, citing its acquisitions of rival companies Instagram and WhatsApp in 2012 and 2014 respectively.
The regulator sought a permanent injunction which would require Facebook to wind down its associations with Instagram and WhatsApp or seek further approval before making any further acquisitions.
However, Judge James Boasberg in Washington, DC said the FTC’s lawsuit was “legally insufficient” and the federal agency had “failed to plead enough facts to plausibly establish” that Facebook had monopoly power over the social networking market, the FT reported.
Boasberg also claimed that the group of US states had waited too long to challenge the acquisition of Instagram and WhatsApp and dismissed the lawsuit.
The FTC will now have 30 days to file a new complaint against the social media giant.
The ruling comes as a big blow as regulators who are seeking to reign in the powers of big tech, with the US government at the forefront.
Google are also facing an antitrust lawsuit from the CMA over alleged fake reviews.
“Facebook’s power is obvious, and yet we have a judge here getting into arcane details of what makes up the market,” former FTC chair Bill Kovacic said to the FT.
“It will be held up as the precise example of why we need to change the law.”