A significant antitrust trial against Meta, the parent company of Facebook, commenced in Washington on Monday, sparking considerable interest in the tech industry. The U.S. Federal Trade Commission (FTC), representing competition and consumer interests, argues that Meta engaged in anti-competitive practices by acquiring Instagram and WhatsApp more than ten years ago.
In his opening statements, FTC lawyer Daniel Matheson asserted, “They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them.” This statement reflects the FTC’s position that the acquisitions were strategic moves to suppress competition rather than genuine efforts to enhance their services.
Meta’s defense and the implications of the trial
Meta’s legal team countered the FTC’s allegations, stating that the commission had previously reviewed and approved these acquisitions. Mark Hansen, representing Meta, described the lawsuit as “misguided,” emphasizing that the company sought to “acquire Instagram and WhatsApp to improve and grow them alongside Facebook.” According to Hansen, the FTC’s assertions that Meta overpaid for Instagram at $1 billion in 2012 and WhatsApp for $19 billion in 2014 are unfounded.
Legal experts, including Rebecca Haw Allensworth, a professor of antitrust law, suggest that evidence from Zuckerberg himself may be pivotal in the case. Allensworth pointed out, “He said it’s better to buy than to compete. It’s hard to get more literal than that.” Matheson highlighted a 2012 memo from Zuckerberg, which discusses the importance of “neutralizing” Instagram, labeling it a “smoking gun” in the FTC’s argument.
Political dynamics surrounding the case
As the trial unfolds, political tensions emerge. Filed during Donald Trump’s presidency, the case risks being viewed through a partisan lens, particularly with Zuckerberg reportedly lobbying Trump to have the FTC drop the lawsuit. Meta has articulated its position, stating that “The FTC’s lawsuits against Meta defy reality,” arguing that the commission’s actions undermine the finality of past approvals.
The relationship between Zuckerberg and Trump has evolved, with Meta’s recent political contributions and strategic board appointments signaling a thawing of relations. In light of this, the potential political implications of the trial cannot be overlooked, especially amid changes in FTC leadership and concerns of political influence on regulatory bodies.
The FTC’s challenges in this case are accentuated by the broader antitrust landscape, particularly as it coincides with ongoing legal battles against other tech giants like Google. Experts predict an uphill struggle for the FTC, with Laura Phillips-Sawyer noting that “they have a long road before any consideration of divestiture of Instagram or WhatsApp is considered.” The outcome of this trial could significantly reshape Meta’s future and the competitive landscape of social media.