Social media giant Meta goes to trial Monday in a pivotal antitrust case brought by the U.S. government, which accuses the company of abusing its market power by acquiring Instagram and WhatsApp to neutralize emerging competition.
The trial, taking place in a Washington, D.C. federal court, dashes hopes by Meta CEO Mark Zuckerberg that a potential return of Donald Trump to the White House might ease government pressure on Big Tech.
Brought by the Federal Trade Commission (FTC), the lawsuit could lead to the unprecedented breakup of Meta, potentially forcing the divestiture of Instagram and WhatsApp — both of which have grown into global behemoths since their acquisitions.
Presiding over the case is Judge James Boasberg, who is also handling a high-profile matter related to White House deportation orders under wartime powers.
The FTC originally filed the suit in December 2020, during the Trump administration, raising questions about whether political shifts might influence the agency’s enforcement approach. But the case has continued to gather momentum under both Republican and Democratic leadership.
Zuckerberg, currently the world’s third-richest person, has made multiple visits to the White House in a bid to sway political sentiment toward a settlement — a move that antitrust experts warn could undermine public trust.
“It would be borderline scandalous if Zuckerberg went to the White House and wound up with a settlement,” said Jonathan Kanter, a leading antitrust enforcer under the Biden administration, in an interview with CNBC.
FTC Chair Andrew Ferguson echoed skepticism about the possibility of an eleventh-hour deal, telling The Verge, “I’d be very surprised if anything like that ever happened.”
As part of his broader lobbying campaign, Zuckerberg reportedly donated to Trump’s inauguration, revised Meta’s content moderation policies, and even purchased a $23 million mansion in Washington, D.C., a move widely seen as strategic positioning closer to U.S. political power.
A major battle for big tech
The Meta trial is one of five landmark antitrust cases currently being pursued by the U.S. government against major tech companies. Google faces two lawsuits, including one where it was found guilty of abusing dominance in the search market. Apple and Amazon are also slated for courtroom showdowns.
The Meta trial is expected to last at least eight weeks and will feature testimony from Zuckerberg, former COO Sheryl Sandberg, and executives from rival firms.
At the heart of the case are two acquisitions:
- Meta’s $1 billion acquisition of Instagram in 2012, which the FTC claims was driven by Zuckerberg’s desire to neutralize a growing threat.
In an internal email cited by the FTC, Zuckerberg described Instagram as “really scary,” adding, “that’s why we might want to consider paying a lot of money for this.” - Meta’s $19 billion acquisition of WhatsApp in 2014, which the FTC argues followed a similar playbook. Zuckerberg allegedly feared WhatsApp could evolve into a rival social network or be acquired by a competitor.
Meta’s legal team will argue that both companies were relatively small at the time of purchase and that Meta’s investments — in infrastructure, security, and user experience — were instrumental in turning them into industry leaders. They will also point out that the apps remain free to use and operate in a highly competitive environment.
Market definition at the center
One of the key issues in the case is how the market is defined.
The FTC contends that Facebook and Instagram dominate the market for social apps used to connect with friends and family, and that this market does not include platforms like TikTok, YouTube, or iMessage.
Meta strongly disputes this framing.
“The evidence at trial will show what every 17-year-old in the world knows: Instagram, Facebook, and WhatsApp compete directly with TikTok, YouTube, X, iMessage, and many others,” a Meta spokesperson said.
Legal analysts agree that the outcome may hinge on how broadly or narrowly the court defines Meta’s competitive landscape.
“The broader Meta can define the relevant market, the more likely it is to defeat the FTC’s case,” wrote Brendan Benedict, a tech law expert, on Substack.
The FTC also argues that Meta’s monopoly power is evident in the declining user experience, with the proliferation of ads and product changes users must accept due to a lack of alternatives.
As the trial unfolds, it promises to serve as a bellwether case for the future of antitrust enforcement in the digital age — and could reshape the landscape of the global tech industry.
AFP
