Meta Prevails in Antitrust Battle, Retains Ownership of WhatsApp and Instagram
In a landmark victory for Meta, a U.S. District Judge has ruled in favor of the tech giant in a major antitrust case brought by the Federal Trade Commission (FTC). The ruling allows Meta to retain ownership of its popular social media platforms, WhatsApp and Instagram, thwarting the FTC's attempt to unwind Meta's acquisitions of these companies. The decision marks the end of a five-year legal battle that began when the FTC filed suit, claiming Meta illegally maintained a monopoly by acquiring Instagram in 2012 and WhatsApp in 2014 to eliminate competitive threats.
Judge James Boasberg of the U.S. District Court for the District of Columbia issued the ruling on Tuesday, following a historic antitrust trial that concluded in late May. Boasberg stated that the FTC failed to prove its claims that Meta holds a monopoly in social networking. He argued that the social media landscape has changed significantly since the FTC filed its lawsuit in 2020, highlighting the rise of competitors like TikTok and YouTube. The judge concluded that Meta faces sufficient competition from these rivals, preventing the company from exercising monopoly power in the social media market.
The FTC's case hinged on the argument that Meta's acquisitions of Instagram and WhatsApp stifled competition and harmed consumers. The agency argued that Meta sought to "neutralize threats" from these competitors. The FTC's director of public affairs, Joe Simonson, expressed deep disappointment with the outcome, stating that "the deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment". Simonson also stated that the agency is reviewing all its options.
Meta countered that its investment in Instagram and WhatsApp allowed these services to grow to a billion-user apps. Meta also cited the rise of TikTok as proof that it continues to face strong competition. Jennifer Newstead, Meta's chief legal officer, stated that the decision "recognizes that Meta faces fierce competition". She added that "Our products are beneficial for people and businesses and exemplify American innovation and economic growth".
The ruling contrasts with two separate rulings that branded Google an illegal monopoly in both search and online advertising. This antitrust case took place amidst growing scrutiny of Big Tech companies and their market power. Recently, Google settled a case with the FTC that requires the search giant to share limited search and user-interaction data with "qualified competitors". Furthermore, another case targeting Google's AI overview feature is ongoing in the European Union.
The Meta case is considered an existential challenge to its business because losing either Instagram or WhatsApp could have significantly damaged Meta's empire. Instagram generates an estimated half of Meta's revenue, and WhatsApp is the world's most popular messaging app. The court's verdict determines that the FTC has not proven that Meta currently holds monopoly power. Judge Boasberg stated that, "Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now".
