Market capitalisation of the social media firm surpassed the $1 trillion mark following the ruling

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Facebook faced the antitrust lawsuits over its acquisitions of Instagram and WhatsApp. (Credit: Firmbee from Pixabay)

A US district court has dismissed federal and state antitrust complaints against Facebook that sought an order on the social media giant to divest Instagram and WhatsApp to address competition concerns.

Judge James Boasberg of the US District Court for the District of Columbia said that the complaint by the Federal Trade Commission (FTC) was legally not sufficient.

Following the court ruling, shares of Facebook surged more than 4% to take the market capitalisation of the social media firm past the $1 trillion mark for the first time.

According to the judge, the FTC could not prove that the company had monopoly power in the social networking market. However, the judge has allowed the FTC to file a new complaint by 29 July 2021.

The FTC had alleged that the social media giant acquired Instagram as its CEO Mark Zuckerberg believed it to be a large and viable competitor. On WhatsApp, the federal agency said that it was acquired by Facebook to offset a nascent threat.

The judge, in his ruling on the FTC lawsuit, wrote: “Although the court does not agree with all of Facebook’s contentions here, it ultimately concurs that the agency’s complaint is legally insufficient and must therefore be dismissed.”

An antitrust lawsuit put up by various US states against Facebook was also dismissed by the judge on the grounds that they delayed too long in challenging the acquisitions of Instagram and WhatsApp. A total of 48 states had sued the social media firm in late 2020.

Facebook had acquired Instagram for $1bn in 2012 and WhatsApp for $19bn in 2014.

Judge Boasberg did not give the opportunity for the states to refile their complaint on the company.

The social media company had previously requested the court to dismiss the antitrust lawsuits saying that they were filed in the fraught environment of constant criticism on it for matters that are not at all related to antitrust concerns.

In April this year, the FTC and some of the US states had urged the court to reject Facebook’s request.