The Federal Trade Commission (FTC) took Meta to trial last week, opening a federal antitrust assault that threatens to tear Mark Zuckerbergs trillion-dollar empire apart.
The trial caps nearly five years of legal wrangling over regulatorsclaimthat Meta crushed competition and illegally established social media hegemony by acquiring Instagram and WhatsApp over a decade ago. At stake is more than Metas ownership of thebillion-userproperties, but whether regulators can set a blueprint for challenging Silicon Valleys biggest players or expose the limits of Washingtons ability to rein them in.(RELATED: One Court Case Could Totally Upend Googles Search Engine Empire)
[The recent swell of tech antitrust cases] represents, really, the first chink in the armor in years against these Big Tech monopolists, Daniel Cochrane, a tech policy researcher at the Heritage Foundation, told the Daily Caller News Foundation. And with respect specifically to the Meta case, it could have really, really major implications for how the digital ecosystem is ordered going forward. If Meta were forced to unwind its purchase of Instagram and WhatsApp, it would offer the first real opportunity in over a decade for a serious competitor to their product.
U.S. Judge James Boasberg, anObama appointee, is presiding over the bench trial. With no jury in play, Boasberg alone will decide whether Metas acquisitions of Instagram in 2012 and WhatsApp in 2014 broke antitrust laws by snuffing out competition.
The case has been a winding procedural journey. The FTCs initialcomplaint, filed in 2020, accused Meta of illegally snuffing out competition with its acquisitions of Instagram in 2012 and WhatsApp in 2014. Boasbergtossedthe case in 2021, finding the agency failed to plead enough facts to plausibly establish that Meta then operating as Facebook held a monopoly over personal social networking services. Regulators returned just months later with a beefed-upcomplaintthat survived a second dismissal attempt, setting the stage for this trial.
But even with a strengthened complaint, the FTC still faces an uphill battle, according to Josh Levine, a tech policy researcher who specializes in digital competition issues at the Foundation for American Innovation.
The tough sledding theyre going to have, the uphill battle, is going to be increasingly proving this kind of fanciful market definition of personal social network services, he told the DCNF. The question is always in these kinds of cases: whats the relevant market? How are you defining the relevant market? Im quite skeptical of the market definition theyre drawing by isolating out Facebook and Instagram from pretty much every other social media app.
The case hinges on how the court defines the market Meta supposedly monopolizes. The FTC claims Meta dominates personal social networking services geared toward connecting friends and family a category narrowly defined to exclude platforms like TikTok, YouTube and X, which regulators classify as content broadcasting platforms in their amended complaint.
Metas defense attacks the FTCs market definition as gerrymandered and artificial.
[The FTCs] alleged personal social networking services market is a textbook example of a gerrymandered market, using an artificially limited set of only four companies Facebook, Instagram, Snapchat and MeWe ignoring many of the most popular activities people engage in on Facebook and Instagram, Jennifer Newstead, Metas chief legal officer, wrote in apress releaseannouncing a motion for summary judgement in the case.
The company points to TikToks dominance in short-form video, YouTubes grip on long-form video, Xs role in real-time public conversations and Snapchats enduring popularity in messaging and photo-sharing as proof users no longer engage with social media through neatly separated personal networking platforms. Instead, Meta argues, users blend messaging, entertainment and content creation across multiple apps making the FTCs narrow framing irrelevant to how real competition works today.
If you look at some of the things the FTC is claiming the most notable is that TikTok, YouTube, Discord, Snapchat are not direct competitors to Instagram and Facebook that, to me, doesnt really hold up, Levine said, echoing Metas arguments.
ANP EMERGENCY!!-Since the passing of Stefan Stanford, ANP's financial situation has become dire.Without significant contributions, the future of All News PipeLine, and our ability to stay online, is in danger. Anything at allANP readers can do to help usishugely appreciated.)
WhatsApp presents an additional wrinkle in the FTCs case, Levine said. Unlike Instagram, which shares more overlap with Facebooks social networking model, WhatsApp is primarily an encrypted messaging service competing more directly with platforms like iMessage, Signal and Telegram. Metaarguesthe apps inclusion in the FTCs theory of harm is misplaced, further complicating any effort to define clear competitive markets.
But even if Boasberg accepts the FTCs market definition, regulators will still have to prove Metas acquisitions harmed competition either by stifling innovation, limiting consumer choice, degrading service quality or blocking new rivals.
Cochrane suggested the FTCs strongest case for anticompetitive behavior relies on internal Facebook communications revealing discussions about their so-called buy or bury strategy.
The emails between Mark Zuckerberg and senior leadership between 2008 and the 2010s, when they acquired both Instagram and WhatsApp, I think that creates pretty clear evidence they had clear intent on anticompetitive behavior when they bought those apps, Cochrane said. The question, of course, the court is facing is whether they in fact have a monopoly.
Beyond the internal Facebook emails, Cochrane pointed to Zuckerbergs own testimony at trial as further evidence of anticompetitive intent. He said Metas leadership recognized Instagram offered a superior photo-sharing service that Facebook could not easily replicate, and calculated would take hundreds of millions if not billions of dollars to catch up. Rather than compete, Cochrane said, Facebook chose to buy Instagram to delay the rise of new rivals, a decision he argued substantiates the anticompetitive allegations at the heart of the FTCs case.
Levine said even if regulators win the case and even if Boasberg orders a breakup in the remedies phase they would still have to clear the biggest hurdle: managing the logistical nightmare a divestiture would create.
I also just think we have to think about the structural dynamics of, like, what does this even look like? How how do you do this? he said.
Forcing Meta to divest Instagram and WhatsApp would not only be the one of the most dramatic antitrust actions in modern U.S. history it would also pose enormous technical challenges. After more than a decade of integration, Levine explained, unwinding the platforms would require separating user data, advertising infrastructure and backend systems that have been deeply fused across Metas businesses. Regulators have offered few specifics about how a breakup would work, or how it would affect the billions of users who rely on the companys services every day.
Still, Cochrane says the logistical nightmare would be worth it.
The big-picture point here is that we need to encourage people to think beyond the obvious and think beyond the status quo, he said. Because the status quo is one that is actually rather inhumane and its actually pretty totalitarian, if you think about it if you think about it in terms of how [this case] would contribute to a post-Big Tech future, perhaps it opens the door for new rivals to come to the fore. Theres a lot of possibilities that could be unleashed if we had more competition and more real choice in these markets, but we have to get past the gatekeepers first.
Regardless of the outcome, the FTCs case against Meta reflects abroader shifttoward a more aggressive antitrust posture in Washington. But it also highlights the steep obstacles regulators face in trying to retroactively unwind mergers that reshaped the digital economy years ago and raises deeper questions about whether traditional antitrust laws are equipped to rein in Silicon Valleys sprawling power.
The trial is expected to stretch through the summer, with a ruling likely by July,accordingto multiple reports. Appeals are all but guaranteed, meaning the battle over Metas future could drag on for years.
ANP is a participant in the Amazon Services LLC Associates Program.
ANP EMERGENCY Fundraiser: Dangerous, Derogatory, Harmful, Unreliable!Those are some of the exact words used by Googles censors, aka 'Orwelliancontent police,' in describing many of our controversial stories.Stories later proven to be truthful and light years ahead of the mainstream media. But because we reported those 'inconvenient truths' they're trying to bankrupt ANP.
Checks or money orders made payable to Susan Duclos can be sent to:
10510 South Ave
Poland, OH. 44514
Anything at all at Amazon purchased after clickingthis ANP link will allow ANP to make a bit of revenue, all of which will be used to keep ANP online and to keep a roof over our heads.
