Entering upon the witness stand just last week was Mark Zuckerberg, CEO of Meta. This blockbuster antitrust trial could dramatically change the world of social media. In late 2020, the Federal Trade Commission (FTC) initiated an unprecedented case against Meta. They claim the company is illegally monopolizing the social media marketplace and maintaining an unlawful monopoly. The government’s case focuses primarily on Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014. They insist that acquiring Instagram for $1 billion and WhatsApp for $19 billion were smart investments focused on neutralizing emerging challengers.
In support of its argument that Meta is not pursuing healthy business growth, the FTC argues that Meta’s acquisition prices reflect a defensive strategy. Yet the agency seems to charge that the company simply decided to acquire competitors rather than compete with them in a fair marketplace. FTC lawyer Daniel Matheson stated, “They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them.”
Zuckerberg’s testimony comes amid assertions that Meta maintains a competitive environment in social media, citing platforms like TikTok, X, and YouTube as rivals. He further painted a picture of how far behind Meta has gotten in the quickly shifting world of social media. Zuckerberg said it best during his testimony when he said, “We are so far behind that we don’t even understand how far behind we are. I am worried that we will be too late to catch up.
Meta’s legal team staunchly defends the company against the FTC’s allegations. Mark Hansen, the company’s attorney, insisted that “acquisitions to improve and grow” are not illegal – ever. And these types of transactions shouldn’t be considered illegal here either, he stressed. The lead litigator for Meta reiterated this point, stating, “Acquisitions to improve and grow have never been found unlawful here.”
The FTC’s final goal should be to have Meta broken up by enforcing a spinoff of either Instagram or WhatsApp. This legislative request underscores the agency’s view that these acquisitions have stymied healthy competition in the social media arena. Meta counters this position by asserting that it has 3.27 billion daily active users across its suite of products, illustrating its success in a competitive market.
Aside from this historic trial currently underway, Meta has again made headlines for crypto’s political connections. The company infamously donated $1 million to Donald Trump’s inaugural fund. Recently, for example, it doubled down on Trumpism by appointing former Trump adviser Dina Powell McCormick and UFC president Dana White — both of whom are Trump allies — to its board of directors. These moves have raised serious concerns among critics who are starting to wonder how far politics is dictating corporate behavior.
Meta’s legal strategy in its lawsuits against the FTC’s lawsuits mimic its claim that the regulatory onslaught it is facing “borders on fantasy. The defense The company has repeatedly maintained that its growth strategy is in line with any traditional business practices. These practices are all about improving service and meeting consumer preferences.
As the trial progresses, both sides prepare for a legal battle that may redefine how large tech companies operate in the face of antitrust scrutiny. The implications go much further than just Meta and its acquisitions. This result has the potential to create precedent that reverberates across the entire tech sector.