The government’s landmark antitrust trial against Meta, the social media giant previously known as Facebook, kicked off in Washington on Monday. Our huge case, FTC v Meta, has long roots. Its genesis lies in the very successful communications strategy pursued by the first administration of the former U.S. president Donald Trump. The Federal Trade Commission (FTC), as you know, is throwing the book at this case. Specifically, they claim that Meta intentionally purchased competing platforms Instagram in 2012 and WhatsApp in 2014 to destroy competition, thus giving the company a monopoly.
The FTC’s case against Meta rests largely on the claim that these purchases were made to eliminate future competitive threats. Laura Phillips-Sawyer, an associate professor of business law at the University of Georgia, has stated that proving the FTC’s case may be more challenging than anticipated.
Meta’s monopoly claims are a big deal, and arrive at a time of increasing scrutiny of big tech companies by regulatory agencies. The FTC has an incredibly important role to play in enforcing antitrust laws. Its lawsuit against Meta could provide a critical roadmap for how to pursue these kinds of cases in the future.
The Department of Justice achieved a crucial outcome in the first stage of an antitrust lawsuit against Google. This win illustrates the still increasing trend towards ensuring more competition in the technology sector. If the FTC upholds its case against Meta, the company should do some serious soul-searching. If granted, this unusual outcome would require CEO Mark Zuckerberg to divest not just Instagram, but WhatsApp.
A spokesperson for Meta commented on the situation, asserting that “the FTC’s lawsuits against Meta defies reality.” They further added that “more than 10 years after the FTC reviewed and cleared our acquisitions, the commission’s action in this case sends the message that no deal is ever truly final.”
Meta’s historical connections to political figures does come into play in this trial. The company contributed $1 million to Trump’s inaugural fund, and there have been reports of Zuckerberg personally lobbying Trump to influence the FTC’s stance on the case. Whether this trial will shed further light on this insidious “revolving door” relationship and how it swayed regulatory decision-making remains to be seen.
Among those scheduled to testify are some huge names including Meta CEO Mark Zuckerberg himself, the former Chief Operating Officer of the firm, Sheryl Sandberg. Their judgment would be a much more informed picture of Meta’s big-picture strategic moves to keep its undesired acquisitions.
Legal scholar Rebecca Haw Allensworth underscored an important aspect of this. She’s confident the evidence put forward at trial will ultimately show just the opposite, that Instagram itself flourished as a result of Facebook’s ownership. “They’ll put on a lot of evidence that Instagram became what it is today because it benefited from being owned by Facebook,” she stated.
This isn’t the first time the FTC has allowed Meta to acquire companies against the recommendations of their own staff. With regulatory scrutiny growing, both public and industry observers are raising doubts about what political pressures could come to bear on the process. Rebecca Kelly Slaughter, a commissioner at the FTC, expressed concerns about potential political interference, saying, “The president sent a very clear signal not only to us but to Chairman Ferguson and Commissioner Holyoak that if they do something he doesn’t like, he could fire them too.”
Alvaro Bedoya, another commissioner, expressed his wish that political considerations would not impact the integrity of the trial. “My hope is that there is no political interference,” he remarked.
From here on out, as the trial itself unfolds, it will primarily focus on scrutinizing Meta’s business practices. It will further consider the broader implications for competition in the technology sector. The federal court’s eventual ruling has the potential to redefine the regulatory environment for large technology companies and how agencies will treat mergers and acquisitions in the future.