The US Federal Trade Commission (FTC) informed a court on Monday that Meta’s acquisitions of Instagram and WhatsApp granted it “monopoly power.” This statement was made at the outset of a high-profile trial that could potentially result in the $1.5 trillion tech giant’s breakup.
The trial, conducted in a Washington district court, is anticipated to reveal the Trump administration’s perspective on antitrust policies and its willingness to challenge major technology firms.
During his opening statement, FTC lawyer Daniel Matheson contended that Meta hindered competition from Instagram and WhatsApp by acquiring them in 2012 and 2014 for $1 billion and $19 billion, respectively. Matheson stated that Meta has established “monopoly power,” with an 85 percent market share in the time users spend on its apps, according to the FTC’s analysis.
Evidence presented included a 2012 email from Facebook founder Mark Zuckerberg describing Instagram as a potential threat and indicating his intention to employ a “buy-or-bury” strategy. Before the acquisition of WhatsApp, Zuckerberg expressed concern in 2013 that the messaging app could disrupt markets where SMS remained predominant, as conveyed to Judge James Boasberg, who is overseeing the case.
Matheson argued that Meta understood the transactions would construct a “moat” safeguarding it from competitors. If found guilty, Meta could be required to reverse its acquisitions of WhatsApp and Instagram, depending on the remedies pursued by the FTC in the second phase of the trial.
The proceedings occur as Zuckerberg, who once prohibited Donald Trump from Facebook, has attempted to cultivate a closer relationship with the US president, including frequent visits to the White House and adjustments to Meta’s content policy rules.
Earlier in the month, Zuckerberg reportedly sought to broker a settlement with the FTC to avert a trial. The case signifies the initial significant challenge to Big Tech under Andrew Ferguson, Trump’s appointed FTC chair, who intends to intensify regulation of the industry, which he accuses of censorship.
Zuckerberg took the witness stand on Monday afternoon, with testimonies expected from Meta’s former chief operating officer Sheryl Sandberg and executives from TikTok, Snap, and Google’s YouTube.
Matheson criticized Meta’s anti-competitive actions, citing substantial increases in advertising on Facebook and Instagram and Meta’s historical privacy failures. He accused Meta of attempting to curtail Instagram’s rapid growth to prevent Facebook’s “network collapse,” referencing a confidential email from 2018.
Hansen, Meta’s lawyer, refuted allegations of monopoly, asserting that the company has never been shielded from competition. He characterized the lawsuit as “misguided” and stretching the country’s antitrust precedents to their limits. Hansen disputed the FTC’s market share assessment, claiming that Meta’s share decreased to less than 30 percent when TikTok and YouTube were considered.
Hansen argued that TikTok indeed competes with Instagram, citing increases in Facebook and Instagram users during TikTok’s temporary shutdown in January. He also stated that Meta enhanced the quality of Instagram and WhatsApp, significantly boosting their user bases since acquisition, while keeping the services free.
Antitrust experts suggest the FTC faces a challenging task, as Judge Boasberg initially dismissed an earlier complaint due to its “legally insufficient” basis before accepting a revised case in 2022. The regulator initially filed a lawsuit against Meta, then known as Facebook, over four years ago during Trump’s first term in office.
