Facebook joins the trillion-dollar club as the U.S court dismisses antitrust lawsuits
- Facebook market cap topped $1 trillion for the first time on Monday.
- U.S. Court dismissed the state & federal antitrust lawsuits against FB.
- Rich Greenfield discusses the verdict on CNBC's "Squawk Box".
Facebook Inc (NASDAQ: FB) shares jumped roughly 5% before market close on Monday, pushing the valuation of the social media giant above $1 trillion for the first time. The price action was attributed to a U.S. District Court that dismissed the state and federal antitrust lawsuits that demanded Facebook to sell WhatsApp and Instagram.
FTC fails to prove Facebook’s monopoly in social networking
Judge James Boasberg said the Federal Trade Commission couldn’t prove Facebook’s monopoly in social networking space. The government agency now has one month to file a new complaint. To states, the District of Columbia said it was now too late to challenge the WhatsApp and Instagram acquisitions. States weren’t given a right to refile their complaint.
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“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,” the verdict said.
The Court, however, rejected Facebook’s claim that “FTC lacks authority to seek injunctive relief against those purchases.”
Rich Greenfield’s comments on CNBC’s “Squawk Box”
Commenting on the ruling, LightShed Partners’ co-founder, Rich Greenfield, said on CNBC’s “Squawk Box”:
“Consumers love using these platforms and keep spending more time on them. Even if you broke them up, what is that actually achieving? Instagram and a lot of these platforms as separate entities would still be massive companies with massive power. So, I’m not sure how you do it and if it’s in the consumer’s best interest.”
Greenfield acknowledged that governments and regulators around the globe are concerned about how quickly these companies are growing. The platforms within these giants are integrated, and it’s a challenge to split them up without disrupting day-to-day operations.
As per the expert, there is no certainty if Facebook will face a breakup in the end, but it’s given that this battle will go on for years, if not decades.
Facebook shares slipped just under 2% on market open on Tuesday. Loup Ventures managing partner and founder Gene Munster like FB stock after it joined the trillion-dollar club.