Meta Platforms, the parent company of Facebook, is facing a significant trial in Washington commencing on Monday over allegations that it established an unlawful social media monopoly by investing billions of dollars to acquire Instagram and WhatsApp, in a case where U.S. antitrust regulators are seeking to undo these transactions.
The U.S. Federal Trade Commission (FTC) contends that these acquisitions, made over a decade ago, were intended to eliminate emerging competitors who posed a potential threat to Facebook’s position as the primary social media platform for users to connect with friends and family. The FTC initiated this lawsuit in 2020 during the first term of President Donald Trump.
The FTC is seeking to compel Meta to restructure or divest parts of its business, including Instagram and WhatsApp.
Meta’s Chief Legal Officer, Jennifer Newstead, described the case as weak and a deterrent to technology investment in a blog post published on Sunday.
She wrote, “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.”
This case presents an existential threat to Meta, which reportedly generates approximately half of its U.S. advertising revenue from Instagram. It will also provide the public with an initial concrete indication of the extent to which the new Trump administration will pursue its pledges to challenge Big Tech.
Meta has been actively engaging with Trump since his election, reversing content moderation policies that Republicans had labeled as censorship and contributing $1 million to Trump’s inauguration. Meta CEO Mark Zuckerberg has also made multiple visits to the White House in recent weeks.
“The Trump-Vance FTC could not be more ready for this trial,” stated FTC spokesperson 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 Expected to Testify
Zuckerberg is expected to give testimony at the trial, where he will be questioned about emails in which he suggested acquiring the photo-sharing app Instagram as a strategy to neutralize a potential competitor to Facebook and expressed concerns that the encrypted messaging service WhatsApp could evolve into a social network.
Meta has argued in court filings that its acquisitions of Instagram in 2012 and WhatsApp in 2014 have provided benefits to users, and that Zuckerberg’s past statements are no longer relevant given the intense competition from ByteDance’s TikTok, Google’s YouTube, and Apple’s messaging app.
A central aspect of the case will be how users spend their time on social media and whether they consider these services to be interchangeable. Meta will likely point to an increase in traffic to Instagram and Facebook during TikTok’s brief shutdown in the United States in January as evidence of competition, according to court documents.
The FTC asserts that Meta holds a monopoly in the market for platforms used to share content with friends and family, where its primary competitors in the United States are Snap’s Snapchat and MeWe, a small, privacy-focused social media app launched in 2016. The FTC has argued that platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube, and Reddit, are not interchangeable with Meta’s services.
U.S. District Judge James Boasberg stated in a ruling in November that while the FTC has presented sufficient evidence to proceed with the trial, the agency “faces hard questions about whether its claims can hold up in the crucible of trial.”
The trial is anticipated to extend into July. Should the FTC prevail, it would need to demonstrate in a subsequent trial that measures such as forcing Meta to sell Instagram or WhatsApp would effectively restore competition.
The loss of Instagram, in particular, could have severe consequences for Meta’s financial performance.
Although Meta does not disclose revenue figures specific to individual apps, the advertising research firm Emarketer projected in December that Instagram would generate $37.13 billion in revenue this year, slightly over half of Meta’s U.S. ad revenue.
According to Emarketer, Instagram also generates more revenue per user than any other social platform, including Facebook.
WhatsApp has thus far contributed only a small fraction of Meta’s total revenue, but it is the company’s largest app in terms of daily active users, and Meta is increasing its efforts to monetize features like chatbots. Zuckerberg has indicated that such “business messaging” services are likely to be a key driver of the company’s future growth.
This case is one of five instances where the FTC and the U.S. Department of Justice have accused major technology companies of maintaining illegal monopolies.
Amazon and Apple are both currently facing lawsuits, and Alphabet’s Google is involved in two lawsuits, including one where a trial is scheduled to commence next week concerning the government’s attempt to force Google to sell its Chrome browser.
