Facebook, Inc. shares will open Wednesday up 0.30% at around $356.70 each - or $1.06 - after a federal judge dismissed two antitrust lawsuits against the company a day earlier.
The shares close Tuesday at $355.64 - a $14.27 or 4.18% increase after a federal judge said the lawsuits - one filed by the Federal Trade Commission and another by a coalition of 48 states - were "legally insufficient."
But former Federal Trade Commission chair, Bill Kovacic, expected the agency to refile the case. He said the government needed to acknowledge the monopoly these companies hold.
"Facebook's power is obvious, and yet we have a judge here getting into arcane details of what makes up the market. It will be held up as the precise example of why we need to change the law," Kovacic said.
Judge James Boasberg in Washington, D.C. said in his decision that the commission had failed to provide enough facts to "plausibly establish" its claims that Facebook holds a monopoly over the online social network industry.
"The Federal Trade Commission has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims - namely that Facebook has monopoly power in the market," Boasberg said.
As for the case filed by the coalition of states, Boasberg said the basis for the alleged violations "took place too long ago."
After his decision was rendered, Facebook's stock price jumped by more than 4% to a high of $357.36 per share. The stock closed at $355.64 per share Monday.
"We are pleased that today's decisions recognize the defects in the government complaints filed against Facebook. The company competes fairly every day to earn people's time and attention," Facebook said in a statement.
The dismissal of the two cases is a major win for Facebook and other large online conglomerates such as Apple, Amazon and Google. Major online companies have been facing increased scrutiny about their alleged monopolistic behavior.
A Federal Trade Commission representative said the agency is closely reviewing the decision and it is assessing the best option forward. Despite the dismissal, the Federal Trade Commission's antitrust case against Facebook is far from over. The court had allowed the Federal Trade Commission to submit additional documents and evidence to support its complaint within the next 30 days.
Sources said the Federal Trade Commission could also opt to file a new case on top of the existing one. The agency's newly appointed chair, Lina Khan, is also expected to pursue other methods to limit Facebook's power. Khan - known for her scrutiny of large online technology companies - is expected to lead the growing bipartisan political movement to rein in the power of big technology conglomerates.
