Meta prevails in historic FTC antitrust case, wont have to break off WhatsApp, Instagram
SAN FRANCISCO (AP) — Meta prevailed an existential challenge to his job This could have forced the tech giant to separate Instagram and WhatsApp after the judge ruled that the company did not have a monopoly on social networks.
U.S. District Judge James Boasberg announced his decision Tuesday, after the landmark antitrust case wrapped up in late May. His decision follows two separate decisions rebranding Google. illegal monopoly on both searches And online advertisingIt’s another regulatory blow to the tech industry, which has experienced nearly unbridled growth for years.
In its decision, Boasberg wrote that the Federal Trade Commission “continues to insist that Meta competes with the same old rivals it has for the past decade, that the company maintains a monopoly among this small group, and maintains that monopoly through anticompetitive acquisitions.” “Whether or not Meta had monopoly power in the past, the agency must show that it continues to have that power now. Today’s court decision finds that the FTC did not do this.”
The FTC said Meta’s CEO Mark Zuckerberg “said in 2008: ‘It’s better to acquire than to compete.’ He argued that he maintained his monopoly by following his strategy. True to this principle, Facebook systematically pursued potential competitors and acquired companies it viewed as serious competitive threats.”
In his testimony in April, Zuckerberg disputed the FTC’s claim that Facebook bought Instagram to eliminate a threat. During questioning, FTC attorney Daniel Matheson repeatedly brought up emails written by Zuckerberg and his associates before and after the Instagram acquisition, many of them more than a decade old.
Zuckerberg, who acknowledged the documents, often sought to downplay the content, saying he wrote them in the early stages of considering a purchase and that what he wrote at the time did not reflect the full scope of his interest in the company.
Facebook also enacted policies designed to make it harder for smaller competitors to enter the market and “neutralize perceived competitive threats” as the world shifted its attention from desktop computers to mobile devices, the FTC’s complaint said.
Boasberg wrote that the social media landscape has changed so much since the FTC filed the lawsuit in 2020 that it changes every time the court examines Meta’s practices and competition. In two opinions to dismiss the case filed in 2021 and 2022, the popular social video platform TikTok was not even mentioned. Today it “takes center stage as Meta’s fiercest rival.”
Quoting the Greek philosopher Heraclitus, Boasberg said, “No one can step into the same river twice,” and said the same applies to the online social media world.
“The landscape that existed just five years ago when the Federal Trade Commission filed this antitrust lawsuit has changed dramatically. While it once made sense to split apps into separate markets like social networking and social media, that wall has since come down,” he wrote.
Facebook acquired Instagram in 2012 — at the time, it was a scrappy photo-sharing app with no ads and a small following. The $1 billion cash-and-stock purchase price was eye-popping at the time, but the value of the deal fell to $750 million after Facebook’s stock price crashed following its initial public offering in May 2012.
Instagram was the first company that Facebook acquired and continues to run as a separate app. Until then, Facebook had been known for smaller “acquisitions,” a type of popular Silicon Valley deal in which a company buys a new startup as a way to hire talented employees and then shuts down the acquired company. Two years later, he did it again with the messaging app WhatsApp. Bought for 22 billion dollars.
WhatsApp and Instagram helped Facebook move its business from desktops to mobile devices and remain popular with younger generations as rivals such as Snapchat (which it tried to acquire but failed) and TikTok emerged. But the FTC has a narrow definition of Meta’s competitive market; It excludes companies like TikTok, YouTube and Apple’s messaging service, which are seen as rivals to Instagram and WhatsApp.
Meta did not immediately respond to a message seeking comment.
