Meta Platforms has taken extensive measures in the courtroom to counter the allegations presented by the US Federal Trade Commission (FTC), which claims that the company operates as a monopoly. The future of the tech giant may hinge on a federal judge’s decision regarding its potential breakup.
The trial, which spanned seven weeks, concluded on Tuesday. Following this, both parties have a period of four months to file their written arguments. US District Judge James Boasberg will then determine whether Meta possesses an illegal monopoly in the social media arena, particularly in relation to its acquisitions of Instagram and WhatsApp—transactions that were finalized over a decade ago.
The FTC contends that Meta, previously known as Facebook, acquired Instagram in 2012 and WhatsApp in 2014 as a means to eliminate potential competition. The agency argues that these acquisitions were intended to solidify Meta’s monopoly in the segment of social networking focused on personal connections among friends and family. Should Judge Boasberg find in favor of the FTC, it could lead to a directive for Meta to divest from Instagram, WhatsApp, or potentially both platforms.
The resolution of this case could take years. If Meta emerges victorious, an appeal from the FTC is likely to follow swiftly. However, Boasberg’s ruling will center solely on the legality of Meta’s actions, and a ruling in favor of the FTC could initiate a subsequent trial to determine how to remedy the consequences of Meta’s conduct.
There is no clear timeline for when Boasberg’s decision will be announced, although it may occur by the end of the year.
A spokesperson for Meta criticized the FTC’s case, labeling it as weak and highlighting the competitive dynamics within the technology sector that were revealed during the trial.
The FTC has not provided a response following the trial’s conclusion. A representative from the agency previously stated that Meta’s defense relied heavily on the perspectives of its officials and compensated experts.
Full Sale
The FTC insists that a complete sale of both assets is necessary to rectify the situation. Judge Boasberg, however, has discretion in crafting a solution. He could determine that only one of the acquisitions was unlawful, thereby requiring the sale of a single service or explore other remedies not yet proposed by the FTC.
In recent weeks, FTC attorneys have rigorously questioned various Meta executives, including CEO Mark Zuckerberg, about the company’s acquisitions and its dominant position within the social networking sector. The FTC asserts that Meta leads a specific segment within the social networking market, categorized as “Personal Social Networking Services,” focusing on sharing among friends and family.
Conversely, Meta argues that its competitors span a broader range beyond traditional friend and family networking, including sectors such as short-form video, e-commerce, and private messaging.
Throughout the trial, new insights emerged, such as Zuckerberg’s prior consideration of spinning off Instagram in 2018 to preempt regulatory challenges. Nevertheless, the final outcome of the trial is likely to revolve around the intricate debate surrounding the competitive market’s definition.
Narrow Market
According to Rebecca Allensworth, a Vanderbilt law professor and antitrust specialist, the FTC’s narrowly defined market has been the weak link in their case. “They are aiming to define a market that is minuscule, closely aligned with Facebook’s operations,” she noted.
Nonetheless, Allensworth acknowledged that the FTC has managed to downplay this vulnerability, noting its argument that Facebook offers a unique connection to friends and family, distinguishing it from other social media platforms. This was evident during peak usage periods, such as holidays, when more users turn to Meta’s services to connect with loved ones.
Meta’s legal team has contended that its offerings have significantly diversified since the inception of Facebook and the acquisitions of Instagram and WhatsApp, thereby expanding the scope of its competition. While the FTC lists Snapchat as a competitor, it does not consider platforms like TikTok or YouTube, nor does it account for Apple’s iMessage.
Justin Teresi, an antitrust analyst with Bloomberg Intelligence, believes that this evolution may favor Meta as it reshapes the competitive landscape.
Friends and Family
Teresi remarked that the primary use of Meta’s products is no longer centered on sharing among friends and family, pointing to the increasing prevalence of recommended content from outside a user’s immediate social network. The FTC has demonstrated that sharing among friends and family persists, yet has struggled to prove that this remains the dominant motivation for users engaging with Meta’s platforms. “They have fallen victim to the passing of time,” he commented.
Executives from other tech firms, including Reddit, X, TikTok, and Pinterest, testified during the trial to showcase how their offerings compete with Meta for user engagement and advertising revenue. While this competition exists, Teresi opines it may not significantly bolster Meta’s positioning, suggesting that if the relevant market focuses solely on advertising dollars, then virtually any platform could be included in that definition.
The direction of Boasberg’s ruling remains uncertain. Teresi estimates a 60 percent probability that Meta will prevail in the trial, while a settlement between both parties prior to the judge’s decision could still occur. Allensworth notes that while the FTC has presented a compelling argument, its sufficiency to necessitate a breakup of Meta remains in question. “All antitrust cases encounter significant challenges,” she explained. “I genuinely believe this could go in either direction.”
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
