A judge has dismissed two antitrust lawsuits against Facebook, one from the Federal Trade Commission and another from a coalition of US states, dealing a significant blow to regulators and sending the social media group’s share price to record levels.

In an opinion on Monday, Judge James Boasberg in Washington, DC said the FTC’s lawsuit was “legally insufficient” and the federal agency had “failed to plead enough facts to plausibly establish” that Facebook had monopoly power over the social networking market.

However, the FTC will have 30 days to file a new complaint, he added.

Boasberg also dismissed a similar case pursued by a group of 46 states and two other jurisdictions — led by New York attorney-general Letitia James — on the basis that any alleged violations took place too long ago.

Facebook’s share price jumped more than 4 per cent on the news to a high of $357.36, with the company surpassing a $1tn market capitalisation for the first time.

“We are pleased that today’s decisions recognise the defects in the government complaints filed against Facebook,” a spokesperson for the social media group said, adding that Facebook “competes fairly every day to earn people’s time and attention”.

The judgment dealt a big setback to regulators, who in December accused the company of anti-competitive conduct, including a “buy or bury” approach of strategically snapping up rivals or cutting off services to those that threatened its monopoly power.

The FTC said at the time that it was seeking penalties including a forced break-up of Facebook from Instagram and WhatsApp, acquisitions the social media giant made in 2012 and 2014 for $1bn and $19bn respectively.

The lawsuits are part of a wider effort by the US government to curb the power of Big Tech companies over allegations of monopolistic practices and abuse of market dominance. Google also faces an antitrust lawsuit brought by the US justice department.

In a bruising opinion on Monday, Boasberg deemed the FTC’s claim that Facebook has a dominant share of more than 60 per cent of the social networking market “unsupported” and “naked”, saying the agency failed to clarify how it calculated the figure.

“[W]hatever it may mean to the public, ‘monopoly power’ is a term of art under federal law with a precise economic meaning: the power to profitably raise prices or exclude competition in a properly defined market,” he wrote.

However, the FTC may be able to correct those failures in a new lawsuit, he added.

Boasberg said there was no case with regards to the allegations that the company cut off services to rivals since the conduct was too far in the past. But “the agency is on firmer ground in scrutinising the acquisitions of Instagram and WhatsApp”, he added.

A spokesperson said the New York attorney-general was reviewing the decision. The FTC could not be reached for comment.

The judgment illustrated the challenges faced by those attempting to redefine US antitrust laws for the digital era.

Regulators have traditionally proved that companies were abusing their market power by showing how the groups raised prices unfairly for their customers.

But academics such as Lina Khan, a prominent Big Tech critic and the newly appointed FTC chair, have argued that companies can abuse their market power without charging anything, whether by degrading services or demanding customers hand over more personal data.

“This suggests that the competitive ecosystem here is pretty broad and dynamic,” said Maureen Ohlhausen, a former FTC commissioner who is now a partner at the legal firm Baker Botts and who has previously worked for Facebook in other matters. “Just saying this is a large company, a lot of people use them, is not enough.”

Doug Melamed, a law professor at Stanford and one of the lawyers who brought the landmark 1998 antitrust case against Microsoft, said: “It is obvious that the team at the FTC wants to move very aggressively. But what they really need is really skilled litigators who can put together good legal arguments, rather than ones that feel good.”

The judgment is also likely to add weight to some progressives’ argument that US antitrust laws are outdated. Members of Congress are debating legislation that would make it easier to prosecute big technology companies.

“Facebook’s power is obvious, and yet we have a judge here getting into arcane details of what makes up the market,” said Bill Kovacic, a former FTC chair. “It will be held up as the precise example of why we need to change the law.”

Kovacic predicted the FTC would refile its case.