Meta is heading to court to defend its acquisitions of Instagram and WhatsApp against antitrust allegations brought by the Federal Trade Commission (FTC). This trial, set to begin soon, could significantly alter the social media landscape, potentially forcing Meta to divest these highly successful platforms. The FTC argues that Meta's acquisitions of Instagram in 2012 and WhatsApp in 2014 were anticompetitive moves designed to neutralize potential rivals and solidify its dominance in the “personal social networking services” market. Meta, formerly known as Facebook, contends that these acquisitions fostered growth and innovation, benefiting billions of users, and that it faces robust competition from other platforms. This legal battle has been years in the making, originating from a lawsuit filed during the Trump administration and later amended under the Biden administration. The FTC seeks remedies that could include unwinding Meta's major mergers. This trial is part of a broader movement to reassess how antitrust laws apply to digital markets, reflecting bipartisan concerns about the power of Big Tech companies. Zuckerberg has personally lobbied Trump to drop the FTC lawsuit. The agency’s chair, Andrew Ferguson, recently suggested that he would obey such an order from Trump. As of now, the case is still set to go to trial. The core of the FTC's case rests on the claim that Meta illegally monopolized the market by acquiring potential competitors. The FTC's amended complaint highlights a 2012 message from Zuckerberg discussing the strategic value of acquiring social media startups like Instagram, noting their established networks and potential to disrupt Facebook's dominance. When Facebook acquired Instagram for $1 billion, the photo-sharing app had only 30 million users and no revenue. Today, Instagram boasts billions of users and is projected to generate over half of Meta's US ad revenue this year. Similarly, WhatsApp had 450 million users when Facebook acquired it for $19.3 billion in 2014, marking the largest startup acquisition at the time. Meta now generates billions annually from ads on Facebook and Instagram that direct users to engage with business accounts on WhatsApp. For Meta, retaining control of Instagram and WhatsApp is crucial. Instagram is a culturally significant platform with a vast creator base, while WhatsApp is the world's most popular messaging app. Both are vital for Meta's plans to distribute its AI assistant and compete in the evolving tech landscape. Separating these apps from Meta's infrastructure would pose significant technical challenges. Meta's defense will likely focus on challenging the FTC's market definition, arguing that it competes with a wide range of services, including LinkedIn, YouTube, TikTok, and iMessage. The company will also emphasize its role in transforming Instagram and WhatsApp into the successful platforms they are today. However, the FTC benefits from recent legal precedents, such as the ruling against Google's search monopoly, which may influence the judge's perspective. The outcome of this trial will have far-reaching implications for Meta and the future of tech antitrust enforcement.
