The Federal Trade Commission (FTC) antitrust trial against Meta has commenced, with the FTC’s lead litigator presenting a 2012 email from Mark Zuckerberg as evidence that Facebook intended to buy Instagram to “neutralize a potential competitor”.
The FTC’s case centers around Meta’s acquisitions of Instagram and WhatsApp, alleging that these purchases were anti-competitive and harmed consumers. Daniel Matheson, the FTC’s lead litigator, flagged Zuckerberg’s 2012 email as a “smoking gun,” indicating that Facebook intended to buy Instagram to eliminate a potential rival. Another email presented at the trial showed Zuckerberg stating that Instagram was growing much faster than Facebook, prompting the decision to acquire it for $1 billion.
Further evidence presented at the trial included a message from Zuckerberg discussing Facebook’s attempt to buy Snapchat for $6 billion. Matheson suggested that Meta had adopted a strategy of buying out rivals rather than competing with them, allegedly deciding “that competition was too hard, and it would be easier to buy out their rivals than to compete with them.”
Zuckerberg is scheduled to testify, potentially facing questions about these emails and Meta’s acquisition strategy. The FTC will present a paper trail of emails where Zuckerberg and other Meta executives allegedly made it clear that acquisitions were intended to remove threats to Facebook’s dominance in the market.
Meta is arguing that the FTC’s case relies on “intent” evidence, specifically decade-old emails expressing competitive concerns, but lacks evidence of actual anticompetitive effects. Meta’s lead lawyer, Mark Hansen, told Law360 that “what people thought at Meta is not really what this case is.” Meta’s chief legal officer, Jennifer Newstead, accused the FTC of lobbing a “weak case” that “ignores reality.”
The trial is expected to last eight weeks, with key testimonies from Facebook’s former chief operating officer, Sheryl Sandberg, and Kevin Systrom, co-founder of Instagram, expected this week. The FTC is alleging that Meta has a monopoly in the “personal social networking market” and that its acquisitions harmed consumers by limiting privacy and increasing ad load. Meta counters that it improved Instagram and WhatsApp through billions of dollars and millions of hours of investment.
The stakes are high for Meta, as the FTC could pursue a breakup of the company, including requiring Meta to spin off WhatsApp and Instagram. Losing Instagram would significantly impact Meta’s revenue, as it is projected to bring in more than half of Meta’s US ad revenue in 2025.
Meta is attempting to broaden the market definition to include more rivals, such as TikTok, X, YouTube, or LinkedIn. The FTC will likely rely on Meta’s internal documents to show who Meta considers rivals. During opening arguments, the FTC shared a Meta document differentiating Facebook as connecting “friends and family,” while other platforms serve different purposes.
The outcome of the trial will have significant implications for the tech industry. Patrick Hedger, the director of policy for NetChoice, warned that undoing Meta’s acquisitions would harm innovation and competition while damaging trust in the FTC long-term. FTC Chair Andrew Ferguson emphasized that “antitrust laws can help make sure that no private sector company gets so powerful that it affects our lives in ways that are really bad for all Americans.”
