Could the second time be the charm for the Federal Trade Commission in its antitrust pursuit of Facebook Inc.?

Legal experts aren’t so sure.

The FTC’s setback in federal court in Washington, D.C., on Monday could have a silver lining: A pair of rulings that dismiss the agency’s and state’s antitrust lawsuits against Facebook

could ultimately lead to a revised — and stronger — complaint, experts says. (Federal judge James Boasberg threw out the FTC suit because, he said, it did not support its claims that Facebook commanded a dominant market share.)

Read more: Judge dismisses Facebook antitrust suit brought by FTC

“It’s hard for the FTC to have presented a worse case. As every prosecutor knows, and as the judge made clear, the FTC need to present facts, not feelings,” Carl Szabo, vice president and general counsel of NetChoice, an industry group whose funders include Facebook, Amazon, and Google, told MarketWatch. “And even using the FTC’s fictitious market definition of ‘Personal Social Networking Services,’ there is no way Facebook has market power when consumers have choices like TikTok, Snapchat
Discord, and Twitter

to name just a few.”

“I hope the FTC learned their lesson and avoids further embarrassment by dropping this suit altogether,” Szabo said. “But I worry that the power of belief will overcome the rational recognition that perhaps the FTC should take the loss and move on to a real problem that has actual consumer harm.”

Antitrust lawyer Doug Gansler, the former Maryland attorney general, is more blunt: “I don’t see where they see hope in a refiling. This is a free service for more than 3 billion people.”  

An FTC spokesman told MarketWatch the commission “is closely reviewing the opinion and assessing the best option forward.”

Should it decide to file an amended complaint within the required 30 days, antitrust experts contend, it could only buttress what many called a “fiasco.”

“The FTC under the previous [Trump] administration pushed through a lawsuit that was not well thought through,” Bhaskar Chakravorti, dean of global business at Tufts University’s Fletcher School, told MarketWatch. “It ought to be no surprise that these suits go through twists and turns as they wind their way through courts and take decades to get to a conclusion — often resulting in a deal. What was shocking here is how quickly the judge threw this one out.”

Newly appointed FTC chair Lina Khan, an expert on Big Tech dominance and prescriptive measures, has the “chance to re-write the charge against Facebook by putting her ideas into practice,” Chakravorti said. “But these are stopgap measures. The FTC was not set up to pursue the breadth of novel issues and policy tradeoffs that digital industries create.”

Alden Abbott, senior research fellow at the Mercatus Center at George Mason University who was general counsel of the FTC until January, said the initial complaint was based on narrow antitrust laws.

“The FTC can appeal, it could refile with more details showing Facebook is a monopoly power, or it can bring in an administrative complaint and pursue a cease and desist,” Abbott told MarketWatch. “None of them is a great option. The FTC faces a real risk in pursuing an action.”

Facebook, which applauded Monday’s decisions as a recognition of “defects in the government complaints filed against Facebook,” has hardly been the worse for wear since the FTC filed its initial lawsuit in December.

The company topped $1 trillion in market value for the first time Monday, and analysts polled by FactSet expect the social-media powerhouse to rack up $27.8 billion in sales for its June quarter and $115.6 billion for the fiscal year.

Ultimately, how the FTC proceeds amounts to threading a needle, says Gansberg. Not only must it refine its complaint against Facebook, but it must do so anticipating where antitrust law is headed.

Indeed, Monday’s decisions illustrate the importance for lawmakers to pass bills that would update antitrust laws and give regulators more legal ammunition to tackle Big Tech firms. Both decisions have followed a pattern of courts interpreting anticompetition rules more narrowly based on decades-old laws.

Six bills marked up last week would cleave business divisions from the likes of Facebook, make it more difficult for Big Tech to acquire smaller competitors, and subvert the powers of digital platforms run by Apple Inc. AAPL, Inc. AMZN, and Google parent Alphabet Inc. GOOGL GOOG.

Whether the bills pass into law — and in what form — is anyone’s guess. On Tuesday, Rep. Steny Hoyer (D., Md.) the House’s second-ranking member, warned the sprawling antitrust package is “not ready for the floor.”

“[T]hey are very important pieces of legislation, and I think there’s a broad agreement that antitrust in the social media field needs to be addressed and the power needs to be addressed, but it needs to be done so in a way that is constructive, not destructive,” Hoyer told reporters.

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