Facebook’s parent Meta platform faced a high-risk trial in Washington starting Monday, claiming it has built an illegal social media monopoly by spending billions of dollars to acquire Instagram and WhatsApp if U.S. antitrust executors try to relax the deal.
The FTC claims that the acquisitions were designed more than a decade ago to eliminate competitors that could threaten Facebook to become a user’s connection with friends and family. The case was filed in 2020 during the first term of U.S. President Donald Trump.
The FTC attempts to force Meta to reorganize or sell a part of its business. This means that if the committee succeeds, Instagram and WhatsApp may evacuate from Meta to become their own entities again.
In a blog post on Sunday, Chief Legal Officer Jennifer Newstead called the case weak and a deterrent effect on technology investment.
“It is ridiculous for the FTC to try to break down a great American company while the government is trying to save the Chinese-owned Tiktok,” she wrote.
The case poses an existential threat to META, which is estimated to have half of U.S. advertising revenue from Instagram, while also giving the public the first real measure of the new Trump administration’s commitment to its commitment to large-scale technology.
Meta has regularly made proposals to Trump since Trump was elected, with Republicans saying Republicans say it constitutes a censorship and donating $1 million to Trump’s inauguration. Meta CEO Mark Zuckerberg has also visited the White House several times in recent weeks.
U.S. President Donald Trump raised record corporate donations for his inauguration, millions of which were donated by CEOs of major tech companies such as Google, Apple, Apple, Amazon and Meta. Andrew Chang explains the shift in Trump’s relationship with these industry leaders since his first term, and their closeness to the president. Getty Images, images provided by Reuters and Canadian media.
“Trump revelry FTC can’t prepare for this trial yet,” said FTC spokesman Joe Simonson.
WhatsApp and Instagram helped Facebook move its business from desktop computers to mobile devices and appear among the younger generation as Snapchat (such as Snapchat (which it also tried but did not buy) and Tiktok.
However, the FTC has a narrow definition of Meta’s competitive market, excluding companies such as Tiktok, YouTube and Apple’s messaging services, from being seen as competitors to Instagram and WhatsApp.
“The FTC already has a difficult task, whether it was 10 years ago or five years ago or today, trying to define what the market we are talking about in a narrow enough way to show that Meta has a lot of power in that market,” said Paul Swanson, an antitrust lawyer at the law firm Holland & Hart & Hart & Hart & Hart & Hart.
“And I do think that as the years go by, the challenges get harder and we’re seeing more and more potential competitors in the social media space.”
Zuckerberg is expected to testify
Zuckerberg is expected to testify at the trial, facing questions about his proposal to obtain an email from the photo-sharing app Instagram to neutralize potential Facebook competitors and expressed concerns that the encrypted messaging service WhatsApp could grow into a social network.
Meta argued in court filings that it benefited users by purchasing Instagram in 2012 and WhatsApp in 2014, and that Zuckerberg’s past statements are no longer relevant as Bytedance’s Tiktok, Google’s YouTube and Apple’s Messagge Apps compete fiercely.
How users spend their time on social media and whether they think these services are interchangeable will be at the heart of the case. According to court records, META will point out that the increase in Instagram and Facebook visits during Tiktok’s brief suspension in the U.S. in January was evidence of competition.
The FTC claims Meta holds a monopoly on the platform used to share with friends and family, and in the United States, its main competitors are Snapchat and Mewe, a small, privacy-focused social media app.
The FTC believes that users broadcast content to strangers’ platforms based on shared interests (such as X, Tiktok, YouTube and Reddit).
U.S. District Court Judge James Boasberg said in a November ruling that while the FTC has enough evidence to move forward, the agency “faces a thorny question about whether its claims can be held up in the trial.”
The trial plan extends to July. If the FTC wins, it must be proven in a second trial that measures such as forcing Meta to sell Instagram or WhatsApp will resume competition.
Instagram is especially valuable to the world
Losing Instagram in particular could prove disastrous to Meta’s bottom line.
Although META did not release app-specific revenue data, advertising research firm Emarketer predicted in December that it will generate $37.13 billion this year, accounting for more than half of META’s U.S. advertising revenue.
According to Emarketer, Instagram also generates more revenue than any other social platform, including Facebook.
Front burner24:43Cases against Google
The second of two major antitrust cases against Google ends this week. Earlier this year, the judge found the company had an illegal monopoly in the Internet search market. Now, the U.S. Department of Justice has the same thing about its control over online advertising. This is part of a major push from the U.S. government’s antitrust lawsuit against tech companies – Apple, Amazon and the Duo are all facing similar cases. What is behind what prompted these companies to crack down on these companies’ attacks? Will the proposed remedies (such as breaking them) make a difference? Will momentum survive the transition to the second Trump presidency? Paris Marx is the author of Tech Marx, the host of podcast technology, and the host of podcast technology won’t save us – break it all down. For a transcript of the front burner, visit: []
WhatsApp has contributed only to Meta’s total revenue so far, but in terms of everyday users, it’s the company’s largest app and is stepping up efforts to make money from tools like chatbots. Zuckerberg said this “business messaging” service could drive the company’s next wave of growth.
The case is one of five cases in which the FTC and the U.S. Department of Justice accuses large tech companies of maintaining illegal monopoly.
Both Amazon and Apple have been sued, while Alphabet’s Google faces two lawsuits, including one, which will begin next week to force Google to force Google to sell its Chrome browser.
