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Meta Platforms Faces Monumental Antitrust Trial in Washington
Image Caption: 3D-printed logos of WhatsApp and Facebook on a computer motherboard, January 21, 2021. — Reuters
WASHINGTON D.C. — Meta Platforms, the parent company of Facebook, is entering a crucial trial in Washington starting Monday. The U.S. government is accusing Meta of creating an illegal monopoly in social media by spending billions to acquire Instagram and WhatsApp. The Federal Trade Commission (FTC) aims to reverse these acquisitions, claiming they were designed to eliminate emerging competitors that could challenge Facebook’s dominance as the premier platform for connecting with friends and family.
The FTC initiated this legal action back in 2020 during Donald Trump’s presidency, arguing that the acquisitions made over a decade ago were a strategic move to fend off potential rivals. The agency is now pushing for a restructuring of Meta, which could involve selling off key assets like Instagram and WhatsApp.
In response, Meta’s Chief Legal Officer, Jennifer Newstead, characterized the FTC’s claims as unfounded and detrimental to tech investment. Reflecting on the situation in a blog post, she stated, "It’s ridiculous that the FTC is attempting to dismantle a successful American company while the current Administration is making efforts to protect TikTok, which is owned by a Chinese company."
The outcome of this case poses a significant threat to Meta, particularly since estimates suggest that Instagram accounts for about half of its U.S. advertising revenue. This trial will also offer insights into how the new Trump Administration intends to act on its promises concerning Big Tech regulations.
Meta has been working on fostering a relationship with Trump since his election. This includes changes to content moderation practices criticized by Republicans as unjust censorship, along with a $1 million donation to his inauguration. Moreover, CEO Mark Zuckerberg has made several visits to the White House in recent weeks.
"The Trump Administration and the FTC are fully prepared for this trial," shared FTC spokesperson Joe Simonson, noting the agency is backed by highly skilled and dedicated legal teams working tirelessly on the case.
Zuckerberg Expected to Testify
Mark Zuckerberg is anticipated to take the stand during the trial, where he will likely be questioned regarding emails in which he discussed acquiring Instagram to neutralize a potential competitor and raised concerns about WhatsApp potentially evolving into a social network.
Meta contends that its acquisitions of Instagram in 2012 and WhatsApp in 2014 have ultimately benefited users. The company argues that Zuckerberg’s past comments are outdated given the intense competition now posed by platforms like ByteDance’s TikTok, Google’s YouTube, and Apple’s messaging app.
Central to the trial is how users engage with social media platforms and whether they view these services as interchangeable. Meta plans to highlight the increase in traffic to Instagram and Facebook during TikTok’s brief U.S. ban in January as proof of competition.
The FTC claims that Meta holds a monopoly on platforms designed for sharing among friends and family, with Snap’s Snapchat and the lesser-known MeWe, launched in 2016, as its main competitors in the U.S. It maintains that platforms catering to content broadcasting based on shared interests—like X, TikTok, YouTube, and Reddit—cannot be considered direct substitutes.
U.S. District Judge James Boasberg noted in a November ruling that while the FTC has sufficient evidence to proceed with the case, it still faces challenging questions regarding the viability of its claims in court.
The trial is expected to continue until July. Should the FTC prevail, it will need to demonstrate in a subsequent trial that measures like requiring Meta to divest Instagram or WhatsApp would indeed restore competition.
A loss of Instagram could be financially devastating for Meta. Although specific revenue figures for apps are not publicly disclosed, advertising research firm Emarketer projected that Instagram would generate approximately $37.13 billion in 2023—over half of Meta’s advertising revenue in the U.S. Additionally, Instagram reportedly generates more revenue per user than any other platform, including Facebook.
While WhatsApp has contributed minimally to Meta’s overall revenue, it ranks as the company’s most-used app on a daily basis, and Meta is intensifying efforts to monetize features like chatbots. Zuckerberg has indicated that services focused on "business messaging" are likely to propel the next phase of growth for the company.
The case is part of a broader set of legal actions against major tech firms, with the FTC and the U.S. Department of Justice alleging that these companies, including Amazon and Apple, maintain illegal monopolies. Google is currently embroiled in two lawsuits, including one where a trial is set to begin to address the government’s attempts to compel Google to divest its Chrome browser.
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