Facebook won the dismissal of two antitrust cases filed by the federal government and a coalition of states when a judge threw out the lawsuits, leading to the company reaching a $1 trillion market valuation on Monday afternoon.
US district judge James Boasberg in Washington on Monday granted Facebook's request to dismiss the complaints, filed last year by the US Federal Trade Commission and state attorneys general led by New York's Letitia James.
The judge said in the opinion that the commission had failed to meet the burden for establishing that Facebook has a monopoly on social networking.
He said the agency could refile the complaint within 30 days.
“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,” Judge Boasberg wrote.
Facebook shares posted their biggest intraday gain in two months after the ruling.
The social media company jumped as much as 4.4 per cent, the most since April 29.
The shares have advanced 29 per cent this year, after the Covid-19 pandemic increased public reliance on Facebook’s apps for staying in touch with friends and businesses, leading to steady growth in users and strong demand for digital advertisements.
About three years after Apple became the first US company to reach the $1tn milestone, there are now four other US technology companies that have 13-digit valuations, including Microsoft, Amazon and Google parent Alphabet. Microsoft reached the $2tn level last week.
Facebook, which Mark Zuckerberg co-founded in 2004 at Harvard University, is the youngest of them all to reach the mark, arriving at $1tn in 17 years.
The growth has come at a cost. Mr Zuckerberg has been so focused on adding users and revenue – including by purchasing the competitive apps Instagram in 2012 and WhatsApp in 2014 – that he chose to ignore some of the downsides of running networks that more than 3.45 billion people contribute content to.
Regulators have charged that during its ascent, Facebook lost control over its users’ data and failed to do enough to stem the flow of potentially harmful or violent information.
The commission, alongside 46 state attorneys general, sued Facebook in December for anticompetitive behaviour, saying the company's size has resulted in consumer harm, including reduced product quality.
Mr Zuckerberg has testified in front of the US Congress several times on Facebook's various missteps.
Yet, from the perspective of an investor, Facebook is thriving. The company faced doubts in its 2012 initial public offering that it would ever be able to make significant money off users of mobile phones.
Ever since Facebook proved that its advertising business would work there, too, it has consistently found ways to beat expectations for revenue and earnings, and to ensure more people sign on to use its products.
With the ruling, Facebook has escaped – at least for now – the most significant regulatory threat to its business to come out of the wider crackdown on US technology companies.
The decision delivers a blow to the commission and the states, which claimed Facebook breached antitrust laws by buying photo-sharing app Instagram and messaging service WhatsApp to cut off emerging competitive threats and protect its monopoly.
It puts new emphasis on antitrust legislation advanced by the Judiciary Committee last week that would make it easier for enforcers to challenge anticompetitive conduct by the biggest technology platforms.
