The antitrust trial between Meta Platforms and the Federal Trade Commission (FTC) has commenced, marking a pivotal moment in the ongoing debate over Big Tech's market power. The FTC's lawsuit, initially filed in 2020 and amended in 2021, challenges Meta's acquisitions of Instagram and WhatsApp, alleging that these acquisitions constitute anticompetitive behavior aimed at establishing a monopoly in the social media market.
The FTC argues that Meta, under the leadership of CEO Mark Zuckerberg, chose to buy out potential rivals rather than compete with them on the merits of innovation. The agency contends that this strategy stifled competition and consolidated Meta's dominance in the "personal social networking" market, which they narrowly define as focusing on connections with friends and family. According to the FTC, this market consists of Meta-owned Instagram and WhatsApp, along with Snapchat and the smaller app MeWe. To remedy this alleged anticompetitive conduct, the FTC seeks to force Meta to divest Instagram and WhatsApp and to require prior notice for any future mergers and acquisitions. FTC Chairman Andrew Ferguson stated the agency believes Meta is a monopoly and is seeking to "restore competition."
Meta, on the other hand, vehemently denies the FTC's allegations and argues that its acquisitions of Instagram and WhatsApp have benefited consumers by improving the apps and expanding their reach. Meta's legal team asserts that the social media landscape is highly competitive, with numerous platforms vying for users' attention, including TikTok, YouTube, and X (formerly Twitter). They criticize the FTC's market definition as artificially narrow, excluding major competitors and misrepresenting the dynamic nature of the industry. Meta also points out that the FTC initially approved the acquisitions of Instagram and WhatsApp years ago, and that the agency's current challenge is an unprecedented instance of "revisionist history." Zuckerberg himself took the stand to defend the acquisitions, arguing that Meta invested heavily in developing the apps.
The trial is expected to last for several weeks and will involve testimony from key witnesses, including Zuckerberg, former Meta COO Sheryl Sandberg, Instagram co-founder Kevin Systrom, and executives from rival social media platforms. The outcome of the trial could have significant implications for Meta, potentially forcing the company to break up its holdings in Instagram and WhatsApp, which are major revenue generators. More broadly, the case could set a precedent for how the U.S. government regulates Big Tech mergers and acquisitions in the future.
The case also highlights the political dimensions of antitrust enforcement. The lawsuit was initially filed during President Trump's first term, and the FTC's current chairman was appointed by Trump. Meta has faced accusations of suppressing conservative voices, further complicating the political landscape surrounding the trial.
Several legal experts note the FTC faces an uphill battle given they approved the acquisitions over a decade ago. The FTC must prove that Meta has monopoly power in the present, not in the past, and must also demonstrate that Meta's acquisitions harmed competition and consumers. Judge James Boasberg, who is presiding over the case, has expressed skepticism about the FTC's narrow market definition.
