(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

WASHINGTON - A Facebook legal ruling shows U.S. President Joe Biden’s deal crackdown may only go so far. On Monday, a U.S. District Court judge dismissed an antitrust lawsuit by the U.S. Federal Trade Commission against the social media giant, saying the agency failed to make its case. That is a blow to an administration that has signaled tougher M&A reviews. Deals may take longer, but in court, companies can prevail.

Washington has been stacked against companies and their dealmakers since the administration changed in January. Lina Khan, who was recently appointed to run the FTC, has an expanded view of antitrust laws to look beyond consumer prices. Earlier this month, the Justice Department sued to block the $35 billion merger of insurance broker Aon with rival Willis Towers Watson.

But Washington’s watchdogs are just one wrench in the process. While the FTC sued Facebook last December, arguing Mark Zuckerberg’s firm used its acquisitions of picture-sharing service Instagram and messaging unit WhatsApp to create a social network monopoly, District Court Judge James Boasberg wagged his finger. In an opinion, he said the agency failed to define the market for social networks, an important detail in its argument.

The government has a month to file an amended complaint, but generally, federal judges have been more skeptical about aggressive approaches to antitrust rules. Former President Donald Trump’s administration also tried to creatively stop tough deals, suing to block AT&T’s acquisition of Time Warner, among others. Courts, too, sided with companies.

Regulators can still trip up deals. A contentious merger can spur months of back and forth between an agency and companies as they negotiate terms to obtain government clearance. A lawsuit to block a deal can take years to resolve. In January, Alphabet’s Google closed its purchase of Fitbit even though the U.S. Department of Justice has not signed off on it yet. The transaction was announced in November 2019.

Still, the Facebook opinion shows it can be worth the fight. The company’s market capitalization temporarily breached $1 trillion after the ruling came through. The FTC has a chance to salvage its case. But judges are putting a heavy burden of proof on the government, giving a shot to rainmakers to ultimately seal their deals.

 

CONTEXT NEWS

- A U.S. District Court on June 28 dismissed a Federal Trade Commission lawsuit against Facebook, saying the complaint is “legally insufficient.” Judge James Boasberg said the agency failed to establish that the company has monopoly power in social networking services except to cite that it has dominant market share, meaning at least 60%. The court said such an assertion is inadequate given that market definitions for a social networking service is unclear.

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

(Editing by Lauren Silva Laughlin and Amanda Gomez) ((SIGN UP FOR BREAKINGVIEWS EMAIL ALERTS http://bit.ly/BVsubscribe | gina.chon@thomsonreuters.com; Reuters Messaging: gina.chon.thomsonreuters.com@reuters.net))