What is the antitrust case against Meta in the U.S.? | Explained

The U.S. FTC is seeking to prove its claim that Meta for years carried out anti-competitive conduct to illegally maintain its monopoly in the personal social networking (PSN) market [File]
| Photo Credit: AFP

The story so far: Nearly five years after the U.S. Federal Trade Commission (FTC) sued Facebook over its alleged monopoly status and for preying on smaller firms it considered threats, CEO Mark Zuckerberg took the stand on Monday to defend the company’s acquisitions of WhatsApp and Instagram, which were bought more than a decade ago.

What is the Meta antitrust case about?

“Kingdom,” “empire,” “titan,” “giant”—these are just some of the words commonly used to describe Meta, which owns Facebook, Instagram, Threads, and WhatsApp, apart from acquiring over 90 other businesses. 

In this antitrust case, the FTC is seeking to prove its claim that Meta for years carried out anti-competitive conduct to illegally maintain a monopoly in the personal social networking (PSN) market.

“The complaint alleges that Facebook has engaged in a systematic strategy—including its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developers—to eliminate threats to its monopoly,” said the FTC.

If the FTC wins, Meta could be forced to divest two major apps that are firmly embedded into its social media ecosystem.

It is key to note that the FTC’s complaint against Meta was initiated during U.S. President Donald Trump’s first term and actively pursued during former President Joe Biden’s term under the leadership of FTC Chair Lina Khan before returning to the current FTC Chair Andrew Ferguson. This case has united American lawmakers and bureaucrats who are otherwise divided along party lines.

What are Meta’s key arguments against the FTC?

Meta (earlier Facebook) bought Instagram in 2012 for $1 billion and bought WhatsApp in 2014 for $19 billion. In order to successfully prove that Meta has an illegal monopoly in the personal social networking (PSN) market, the FTC has to first define the market and then defend its allegations. However, Meta argues that the FTC’s definition of this market is too small and leaves out other major apps that compete with Instagram and WhatsApp.

“The FTC’s weak lawsuit against Meta ignores reality. In order to try to win this case, the FTC is alleging that our only competitors are Snapchat and an app called MeWe,” noted Meta in an official statement on April 13.

“The evidence at trial will show what every 17-year-old in the world knows: Instagram competes with TikTok (and YouTube and X and many other apps),” said the company.

Meta further blasted the FTC for trying to break up “a great American company” while the government was trying to save the Chinese-owned TikTok.

During the trial, Meta’s legal team showed slides demonstrating how TikTok, YouTube Shorts, and Instagram Reels had close to identical user interfaces. The slides further highlighted how users switch between Meta apps and alternatives such as Shorts, Snapchat, TikTok, Twitter, and even messaging apps.

The Facebook-parent insisted that it was not a monopolist, but that its acquisitions were pro-competitive, and produced “extraordinary efficiencies.”

Meta emphasised the “billions of dollars and millions of hours of investment” it put into improving both Instagram and WhatsApp after the takeovers to power their growth and bring their features to more users at no cost.

What role has Mark Zuckerberg’s political affiliations played in Meta’s antitrust trial?

As Trump’s popularity surged ahead of the 2024 U.S. presidential election, Zuckerberg attempted to establish closer ties with Trump and his conservative voter base. He dined with Trump, donated $1 million to the 47th president’s inauguration fund, was present at the inauguration, criticised his own company’s fact-checking policies, went back on Meta’s diversity commitments, and has even echoed right-wing talking points. He also bought a mansion in Washington DC to stay closer to the White House, and reportedly met with Trump ahead of the Meta antitrust trial, per media reports.

In spite of these tactical attempts, Zuckerberg had to appear in court, where he was grilled about his early-stage plans for Instagram and asked to comment on past correspondences about the app, in which he expressed concerns about its popularity and even considered strategies to defeat Instagram.

Has the FTC sued Meta before?

Meta and the U.S. FTC have a thorny history. In 2019, the FTC hit Facebook with a “record-breaking” penalty of $5 billion over charges that it violated a 2012 FTC order and misled its users about their data privacy.

In 2023, Meta sued the FTC over the regulator’s proposed changes to the way it handles users’ data, including personal information belonging to children.

Could Meta be forced to divest Instagram and WhatsApp?

It is hard to tell at this point as the FTC has struggled to bring the case to where it stands now. The original 2020 complaint was dismissed in 2021 by U.S. District Judge James Boasberg, who was not convinced by the FTC’s allegations. Though the complaint was amended, re-submitted with more details, and then cleared during former Chair Khan’s term, Boasberg warned that the agency may still find it tough to prove its allegations.

During a Fox Business interview on April 14, the current FTC Chair Ferguson said the agency thought of Meta as a monopoly and would try to prove it in court. On the flip side, he also said he would help implement Trump’s “deregulatory” agenda when it came to mergers.

While the outcome of the Meta antitrust case is unknown, it is clear that fears about Meta’s tremendous influence over the digital landscape are uniting U.S. enforcers regardless of their party loyalties.