Mark Zuckerberg’s strategic acquisitions of Instagram and WhatsApp, which took place in 2012 and 2014 respectively, have played a significant role in expanding his social media empire to reach billions globally.
Over a decade later, the US Federal Trade Commission (FTC) is challenging those acquisitions in a pivotal antitrust trial slated to begin Monday. The agency argues that these deals were illegal, should never have received approval, and demands their dissolution.
The FTC’s position frames Meta’s purchases of Instagram and WhatsApp as “killer acquisitions” that stifled competition, asserting that permitting these deals was a misstep. To substantiate its argument, the FTC intends to present evidence indicating that the quality of Meta’s applications has diminished, particularly marked by an increase in advertisements and reduced privacy protections.
This trial, taking place before US District Judge James Boasberg in Washington, poses a significant threat to Meta’s market dominance. Should a breakup be ordered, it would disrupt several of the most widely used digital platforms, reverse years of integration with Facebook, and raise important questions regarding the government’s approach to evaluating and approving corporate mergers.
With Meta’s market capitalization standing at approximately $1.3 trillion (around Rs. 1,11,85,447 crore), the potential breakup could lead to substantial losses in market value, particularly as Instagram generates a considerable portion of the company’s advertising income.
The trial is expected to feature prominent executive witnesses, including Zuckerberg and former Chief Operating Officer Sheryl Sandberg.
In its defense, Meta expressed confidence that the evidence presented will demonstrate that the acquisitions of Instagram and WhatsApp have been beneficial for competition and consumers. The company criticized the FTC for contesting the deals more than ten years after they were approved.
FTC spokesman Joe Simonson stated, “The Trump-Vance FTC could not be more prepared for this trial,” emphasizing that the agency is staffed with some of the most capable and diligent attorneys in the nation.
Regulating Competition
The ongoing case will evaluate the government’s capability to regulate competition within the rapidly evolving tech industry, which has transformed significantly since the FTC initiated the lawsuit during the Trump administration. Following the lawsuit, notable changes in the tech landscape occurred, including Elon Musk’s acquisition of Twitter Inc. and TikTok’s rise to prominence as a leading social media platform, alongside Meta’s introduction of competing offerings.
Zuckerberg has recently been cultivating favorable relations with the Trump administration through relaxed content policies and the removal of certain initiatives. Reports indicate that he has privately urged Trump to intervene and assist in settling the ongoing case, though analysts suggest it is unlikely for Trump to intervene at this juncture.
Nonetheless, there is potential for Trump to become involved at a later stage. Should Meta receive an unfavorable ruling, experts believe he might pressure FTC commissioners to negotiate a settlement during any appeal process. Earlier this year, Trump demonstrated influence over the agency by dismissing two Democratic commissioners, who are now contesting their termination in court, while the agency currently operates under two remaining Republican members.
“The remaining commissioners are undoubtedly aware that if he could remove two Democratic members, they could also find themselves dismissed,” said Jennifer Rie, senior litigation analyst at Bloomberg Intelligence. “Therefore, they might think twice about opposing him or not following his directives.”
Preparing for Trial
FTC Chair Andrew Ferguson recently told Bloomberg TV that the agency is “gearing up for trial,” but noted that he would adhere to lawful orders should Trump request the case be dropped, although he expressed doubt that such a situation would arise.
Shortly after the Meta trial begins, a separate case involving Alphabet’s Google will be heard in the same courthouse, focusing on whether Google should face a breakup after being found to have illegally monopolized the online search market. These high-profile cases signal that the current administration is committed to pursuing antitrust actions against major tech firms established under Trump’s first term.
The ultimate outcome of the Meta case will depend on how social media is defined and whether the court determines that Meta holds a dominant position in that market. The FTC will concentrate on personal social networking services, which it argues encompass primarily messages and media exchanged among close contacts.
The agency maintains that competing with Meta is limited, with only Snap Inc.’s Snapchat and a smaller platform called MeWe standing as alternatives. It also references former competitors like MySpace that have since ceased operation.
The trial is poised to unveil a trove of internal communications regarding Meta’s growth strategy over the past 15 years, including Zuckerberg’s remark on the rationale behind the Instagram acquisition, stating, “It is better to buy than compete.”
Meta, however, contends that it faces formidable competition from various platforms beyond Snap, which include Elon Musk’s X, TikTok, and Google’s YouTube. The company argues that its replication of popular features from competing platforms illustrates a concerted effort to adapt to consumer demands within a highly competitive market.
While the FTC maintains that Instagram and TikTok do not serve as competitors within the social networking domain, Meta intends to argue against this by showcasing how TikTok’s temporary ban in January led to increased engagement with its own services. The FTC will have the opportunity to incorporate testimony from TikTok and Pinterest regarding its interpretation of the competitive landscape.
Notable Legal Proceedings
During a recent pre-trial demonstration, Judge Boasberg acknowledged his lack of expertise concerning Meta’s products, revealing that he does not have a personal account with the company and questioning the value of engaging with the “like” function on posts. Nevertheless, he is involved in high-profile legal matters, including ongoing litigation regarding contentious deportation practices to Venezuela, which have received criticism from Trump, alongside a case involving high-ranking US officials and military discussions conducted via a Signal chat.
The resolution of the Meta case could take years, as Judge Boasberg will first determine whether the company’s acquisition practices violated legal statutes. Should he rule in the affirmative, a subsequent phase will address potential remedies for competitive market impacts.
This case is not Meta’s sole conflict with the FTC. The agency also accuses the company of breaching the stipulations of a 2019 privacy agreement that resulted in a record $5 billion fine imposed to address prior data security violations. Additionally, Meta is facing a related investor lawsuit in Delaware set to be heard in the near future.
Many Wall Street analysts have speculated on the possibility of a settlement in the antitrust matter, with Wolfe Research LLC analyst Shweta Khajuria noting that investors are optimistic about potential influence from Trump now that his rapport with Zuckerberg appears to have improved.
“I don’t foresee investors preparing for a breakup,” Khajuria commented. “A settlement is viewed as a more favorable outcome than a prolonged period of uncertainty, which would create a lingering concern for the stock.”
© 2025 Bloomberg LP
