A trial began on Monday, April 14, against Meta
, a company that the regulator accused of creating an illegal monopoly on social media through its acquisitions of Instagram and WhatsApp. In connection with this, as Reuters reports, U.S. antitrust authorities will try to overturn those deals.
Image source: Alexander Shatov/unsplash.com
The US Federal Trade Commission (FTC) filed a lawsuit against Meta (then Facebook) in 2020, during Donald Trump’s first term in office. The commission alleges that the company’s acquisitions of Instagram and WhatsApp were intended to eliminate new competitors that could threaten Facebook’s status as a social media platform.
Meta CEO Mark Zuckerberg is set to testify in court to answer questions about emails in which he proposed buying photo-sharing app Instagram as a way to neutralize a potential Facebook rival and expressed concerns about messaging service WhatsApp becoming a social network.
In response to the allegations, Meta said in court documents that its 2012 purchase of Instagram and 2014 purchase of WhatsApp had benefited users, and that Zuckerberg’s claims in question were no longer relevant amid fierce competition from ByteDance’s TikTok, Google’s YouTube, and Apple’s messaging app. For example, during TikTok’s brief shutdown in the U.S. in January, traffic to Instagram and Facebook immediately increased, indicating competition from the Chinese short-video service.
The FTC, meanwhile, argues that platforms like X, TikTok, YouTube, and Reddit, where users broadcast content to strangers based on shared interests, are not interchangeable. And that Meta’s main competitors in the U.S. are Snapchat, a Snapchat-owned app, and MeWe, a small privacy-focused social media app launched in 2016, giving it a de facto monopoly on platforms used to share information with friends and family.
The trial is scheduled to begin in July. If the FTC wins, a second trial will take place, where the regulator will have to prove that selling Instagram or WhatsApp will restore competition in the market.
Meanwhile, experts say that selling Instagram could spell financial disaster for Meta, as the platform brings in the lion’s share of its revenue from advertising. Emarketer forecasts that Instagram will bring in $37.13 billion for Meta this year, which is just over half of the company’s US advertising revenue. WhatsApp is not as profitable for Meta, but it provides the company with a significant audience, which will be useful in terms of ramping up its efforts to make money from chatbots. Zuckerberg said that “business messaging” will likely be the driving force behind the company’s next wave of growth.
The case against Meta is one of five in which the FTC and the U.S. Department of Justice are accusing big tech companies of illegal monopolies. In particular, there are ongoing lawsuits against Amazon and Apple, and another one is scheduled to begin next week against Google, in addition to the existing lawsuit.