Meta antitrust trial: FTC challenges Instagram, WhatsApp acquisitions

Meta faces antitrust trial as FTC claims it illegally monopolises social media by acquiring Instagram and WhatsApp.

In Short

The FTC is suing Meta for allegedly monopolising social media and is seeking to force it to sell Instagram and WhatsApp, which would impact its advertising revenue.

Meta contends it faces competition from platforms like TikTok and YouTube, while the trial highlights ongoing challenges in regulating digital monopolies.

The Federal Trade Commission (FTC) has initiated an antitrust trial against Meta, alleging it has monopolised the social media market. The FTC seeks to compel Meta to divest Instagram and WhatsApp, which could critically harm the company’s advertising revenue.

During the trial, FTC attorney Daniel Matheson stated that Meta opted for acquisitions over competition.

Meta argues that it faces significant competition from platforms like TikTok and YouTube, highlighting that consumer behaviour shows people switch between these platforms.

Consumer substitution

Mark Hansen, Meta’s lawyer, noted that consumer substitution is evident, as demonstrated during a TikTok outage when users turned to Instagram. Moreover, discussions indicate that Meta CEO Mark Zuckerberg has attempted to negotiate a settlement, although no agreement has been reached.

The case’s history dates back to 2020 when an original lawsuit was dismissed for lack of evidence. An amended complaint was later accepted under a new administration. The FTC argues that Facebook, Instagram, and WhatsApp dominate personal social networking, while other platforms serve different interests.

The trial is expected to last around eight weeks. If the court finds Meta liable, it could lead to significant remedies, including a potential breakup.

Analysts indicate that losing Instagram could severely impact Meta’s business, as Instagram accounts for a significant portion of its U.S. sales.