WASHINGTON – Facebook parent Meta Platforms bought up nascent rivals Instagram and WhatsApp after its attempts to compete had failed, an attorney for the US Federal Trade Commission (FTC) said at the beginning of a high-stakes trial in Washington on April 14, where US antitrust enforcers seek to unwind the deals.
FTC attorney Daniel Matheson said that the unlawful strategy “established entry barriers that for more than a decade protected Meta’s dominance”.
“Consumers do not have reasonable alternatives they can turn to,” he said.
The case, filed during USPresident Donald Trump’s first term, claims Meta bought the companies a decade ago to eliminate competition among social media platforms where users connect with friends and family.
The FTC seeks to force Meta to restructure or sell parts of its business, including Instagram and WhatsApp.
Meta chief legal officer Jennifer Newstead called the case weak and a deterrent to tech investment in a blog post on April 13.
“It’s absurd that the FTC is trying to break up a great American company at the same time the administration is trying to save Chinese-owned TikTok,” she wrote.
The case poses an existential threat to Meta, which by some estimates earns about half its US advertising revenue from Instagram, while also giving the public its first real measure of how strongly the new Trump administration will follow up on its promises to take on Big Tech.
Meta has been making regular overtures to Mr Trump since his election, nixing content moderation policies Republicans said amounted to censorship and donating US$1 million (S$1.3 million) to Mr Trump’s inauguration. Meta chief executive Mark Zuckerberg has also visited the White House multiple times in recent weeks.
“The Trump-Vance FTC could not be more ready for this trial,” said FTC spokesman Joe Simonson, adding: “We are blessed with some of the most hardworking and intelligent lawyers in the country who are working around the clock.”
Zuckerberg set to testify
Mr Zuckerberg is expected to testify at the trial, where he will face questioning about e-mails in which he proposed acquiring photo-sharing app Instagram as a way to neutralise a potential Facebook competitor and expressed worry that encrypted messaging service WhatsApp could grow into a social network.
Meta has argued in court papers that its purchases of Instagram in 2012 and WhatsApp in 2014 have benefited users, and that Mr Zuckerberg’s past statements are no longer relevant amid fierce competition from ByteDance’s TikTok, Google’s YouTube and Apple’s messaging app.
How users spend time on social media, and whether they consider the services interchangeable, will be core to the case.
Meta will point to an increase in traffic to Instagram and Facebook during TikTok’s brief shutdown in the US in January as evidence of competition, according to court records.
The FTC claims Meta holds a monopoly on platforms used to share with friends and family, where its main competitors in the US are Snap’s Snapchat and MeWe, a tiny privacy-focused social media app launched in 2016.
Platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube and Reddit, are not interchangeable, the FTC has argued.
US District Judge James Boasberg said in a ruling in November that while the FTC has enough evidence to move forward, the agency “faces hard questions about whether its claims can hold up in the crucible of trial”.
The trial is scheduled to stretch into July. If the FTC wins, it would have to prove at a second trial that measures such as forcing Meta to sell Instagram or WhatsApp would restore competition.
Losing Instagram, in particular, could prove catastrophic to Meta’s bottom line.
While Meta does not release app-specific revenue figures, advertising research firm eMarketer forecast in December that Instagram would generate US$37.13 billion in 2025, a little over half of Meta’s US ad revenue.
Instagram also generates more revenue per user than any other social platform, including Facebook, according to eMarketer.
WhatsApp to date has contributed only a sliver to Meta’s total revenue, but it is the company’s biggest app in terms of daily users and ramping up efforts to earn money off tools like chatbots.
Mr Zuckerberg has said such “business messaging” services are likely to drive the company’s next wave of growth.
The case is one of five where the FTC and US Department of Justice accuse Big Tech companies of maintaining illegal monopolies.
Amazon and Apple are both being sued, and Alphabet’s Google is facing two lawsuits, including one where a trial is set to begin next week on the US government’s bid to force Google to sell its Chrome browser. REUTERS
US prepares to challenge Meta’s social media dominanceMeta CEO Zuckerberg lobbies Trump to avoid antitrust trial, WSJ reports
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