Meta does not have social media monopoly, judge rules

A US district judge in Washington has ruled that Facebook parent company Meta Platforms did not violate antitrust laws with its acquisition of photo-sharing app Instagram and messaging service WhatsApp more than a decade ago.

The decision handed Meta a defeat in 2020 from the Federal Trade Commission, the US antitrust watchdog, which alleged that the company had gained a monopoly on social media by acquiring its rivals.

“The court ultimately concluded that the agency did not bear its own burden: Meta does not have a monopoly in the relevant market,” Judge James Boasberg wrote Tuesday.

The company welcomed the decision, telling the BBC it “recognised that Meta faces fierce competition”.

In April, Judge Boasberg presided over a lengthy court hearing that included testimony from Meta CEO Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, who claimed that TikTok and YouTube were shaking up the social media landscape.

In his decision, Judge Boasberg noted that the FTC reviewed and approved Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014.

The agency argued that the company overpaid when it purchased Instagram for $1 billion and WhatsApp for $19 billion.

Judge Boasberg described an ever-changing social media landscape where “apps wax and wane, chasing one craze and diverging from others, and new features being added with each passing year.”

Even if Meta had monopoly power in the past, he said, the FTC failed to show that it “continues to have such power at this time” because Meta’s market share “appears to be shrinking.”

In a statement to the BBC, the FTC said it was unclear whether it planned to appeal.

“We are deeply disappointed by this decision,” said FTC Public Affairs Director Joe Simonson, adding that the agency is reviewing all of its options.

Simonson also told the BBC that Judge Boasberg, who has clashed with the Trump administration on multiple occasions and is facing an effort by congressional Republicans to impeach him, has always been against us.

The BBC asked Judge Boasberg for comment.

With its victory on Tuesday, Meta averted a possible breakup of the company that could have included a split of Instagram and WhatsApp.

“Our products benefit people and businesses and exemplify American innovation and economic growth,” a Meta spokesperson told the BBC on Tuesday. “We look forward to continuing to partner with management and invest in America.”

The decision comes after the Justice Department won two previous antitrust lawsuits against Google; one for an alleged monopoly in online search, the other in advertising technology.

But earlier this year, another district judge presiding over the online search case in Washington refused to force Google to separate its Chrome browser; The justice ministry suggested it was a necessary step to end the tech giant’s search monopoly.

Against that backdrop, Tuesday’s decision against the FTC “seems like a change in momentum,” said Rebecca Haw Allensworth, an antitrust law professor at Vanderbilt Law School.

“I think this will impact the likelihood of more cases like this being filed.”

But Allensworth added that the decision does not indicate that the government’s efforts to curb antitrust behavior have failed.

“It’s a mixed bag,” he said.

Many legal observers say the FTC’s case against Meta has been challenging from the beginning.

“The case was always a difficult one, especially given how rapidly we have seen changes in the social networking market in recent years,” said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.

Still, he said the case revealed “a series of statements Zuckerberg made around the acquisitions that appeared to be a desire to eliminate an emerging threat to Facebook’s dominance.”

Meta’s legal tangles are not over yet.

Mr. Zuckerberg has been ordered to testify in a landmark case about the impact of social media on young people.

Last month, Los Angeles County Superior Court Judge Carolyn Kuhl rejected Meta’s argument that attending an in-person hearing in January was unnecessary.

Instagram president Adam Mosseri is also expected to testify at the hearing. The hearing stems from accusations that Meta and other social media companies made their practices addictive in young people despite being aware of the mental health risks.