A landmark antitrust trial against Meta is underway in Washington, with the US Federal Trade Commission (FTC) alleging that the company, formerly Facebook, illegally acquired Instagram and WhatsApp to eliminate competition and create a monopoly.
The FTC reviewed and approved Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014, but committed to monitoring the outcomes. The commission now argues that these acquisitions effectively gave Meta a monopoly, eliminating competition in the process. If the FTC wins the case, Meta CEO Mark Zuckerberg could be forced to sell off both Instagram and WhatsApp.
Rebecca Haw Allensworth, a professor of antitrust at Vanderbilt Law School, says the FTC’s argument centers on the idea that Meta’s acquisition of Instagram was a way to neutralize a rising competitive threat to Facebook. Allensworth believes that Zuckerberg’s own words, including those from his emails, may offer the most convincing evidence at trial. “He said it’s better to buy than to compete. It’s hard to get more literal than that,” she says.
Meta is likely to argue that the key question is whether consumers are better off as a result of the mergers. The company will likely present evidence that Instagram became what it is today because it benefited from being owned by Facebook, and that users have had a better experience since the takeover. Zuckerberg and the company’s former chief operating officer, Sheryl Sandberg, are both expected to testify at the trial, which could run for several weeks.
The case has become politicized, with Zuckerberg reportedly lobbying former US President Donald Trump to have the FTC drop the case. Relations between Zuckerberg and Trump have fluctuated, including Trump’s ban from Meta’s social media platforms after the US Capitol riot in January 2021, followed by Meta’s financial contributions to Trump’s inaugural fund and the appointment of Trump ally Dana White to Meta’s board of directors.
The trial also coincides with controversy surrounding the FTC’s independence. Trump fired two FTC commissioners, Democrats Rebecca Kelly Slaughter and Alvaro Bedoya, who believe the move was meant to intimidate the commission. Slaughter and Bedoya are suing the Trump administration to be reinstated, and have expressed alarm at reports of Zuckerberg’s lobbying efforts. FTC Chair Ferguson has stated that he would “obey lawful orders” if directed to drop the case, but said he would be surprised by such direction.
The FTC’s case against Meta is considered challenging, with legal experts suggesting that the commission faces an “uphill battle” in proving its case. Laura Phillips-Sawyer, an associate professor of business law at the University of Georgia, notes that there’s more competition in the personal network services space that Meta operates in, compared to online search. Meta argues that Instagram, Facebook, and WhatsApp compete with other platforms like TikTok, YouTube, X, and iMessage.
The trial occurs as another major antitrust case, USA v Google, enters its remedies phase, following a ruling that Google holds a monopoly in online search. The FTC’s case against Meta will be closely watched, with significant implications for the tech industry and the role of independent regulatory agencies.
