How Facebook Beat The FTC’s Antitrust Lawsuit And Reached A $1 Trillon Market Cap | Forbes

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Facebook is a giant. That’s not opinion, that’s fact: The company sports a trillion-dollar market cap and collected $70.7 billion in revenue last year, far more than its nearest competitor within social media. Meanwhile, over $60 billion in cash sits on its balance sheet. Its founder, Mark Zuckerberg, is the fifth-richest person in the world thanks to his stake in the business, and another half-dozen or so billionaires draw their fortunes from Facebook, too. 

But when FTC regulators set out to prove something similar—that Facebook is not only a giant but also a giant monopoly—they swung and missed. And a federal judge on Monday dismissed their much-watched antitrust case against Facebook, seen as the government’s first real effort to curb the company’s dominance after several years of increasing political rhetoric against the company and rounds of congressional testimony probing into the business.

What happened? The FTC hinged its case around one figure. In the original 53-page court filing made back in December, the FTC estimated Facebook owned “in excess of 60%” of a market the government defined as “personal social networking.” The FTC didn’t offer any further details about how it arrived at the 60% figure nor what it represented: Users, revenue—something else? It was all unclear. Likewise, what exactly constitutes “personal social networking,” a term the government coined for its argument. The phrase, theoretically, allows the FTC to draw a distinction between Facebook and professional networks, like LinkedIn, and messaging apps, like Telegram or Signal. Putting Facebook into a separate bucket where there aren’t many other competitors would—again, theoretically—bolster the government’s case, which revolves around the idea that Facebook hampers competition. The lack of many serious rivals would seem like strong proof of that.

In attempting to combat Facebook, Federal Judge James E. Boasberg, an Obama appointee, admitted regulators faced a tougher task than if they were pursuing a more traditional business. Sites like Facebook “are free to use, and the exact metes and bounds of what even constitutes a [personal social network] service—i.e., which features of a company’s mobile app or website are included in that definition and which are excluded—are hardly crystal clear,” Boasberg writes. But the government’s argument lacked necessary detail, the judge concluded. “The FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague ‘60%-plus’ assertion too speculative and conclusory to go forward,” Boasberg writes. 

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