Meta faces antitrust trial that could force it to sell Instagram, Whatsapp
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The news: The US Federal Trade Commission’s (FTC) antitrust lawsuit against Meta could see the Facebook owner forced to sell its platforms Instagram and Whatsapp.
The numbers: Meta purchased Instagram for around USD1 billion ($1.58 billion) in 2012 and Whatsapp for USD22 billion in 2014. The FTC approved the acquisitions at the time, but committed to monitor the outcomes of the purchases.
The context: The trial, commencing in Washington on Monday, will see the FTC attempt to force Meta to restructure or sell off parts of its social media empire, arguing that Meta has built an illegal social media monopoly with its purchase of Instagram and Whatsapp.
The competition watchdog has called on Judge James Boasberg to restore competition in the sector by ordering Meta to sell off its prized assets.
To succeed, the FTC must prove that Facebook has a longstanding monopoly on “providing personal social networking services in the US.” It must also must show that Meta's purchases harmed competition in the industry.
Meta’s key defence is that the FTC is defining the market too narrowly, and that a variety of apps including YouTube and TikTok are key Meta competitors. Meta will also argue that consumers and advertisers are not worse off because of its ownership of Whatsapp and Instagram. “The FTC must prove that consumers would have had more (or better) options sooner without the acquisitions,” Meta submitted last week. “Meta respectfully submits that the FTC will not be able to introduce any evidence to satisfy its burden.”
A loss would be a huge hit for Meta, which reportedly derives around half of its US advertising revenue through Instagram. Meta founder Mark Zuckerberg has reportedly been meeting with President Donald Trump over the past weeks, in efforts to lobby White House officials to agree to a settlement before trial.
The trial comes at a chaotic time for the FTC, after Trump fired two Democratic commissioners Alvaro Bedoya and Rebecca Kelly Slaughter in efforts to ratchet up control of government agencies. The newly appointed FTC chair Andrew Ferguson last week said that he would follow the president’s orders with regard to the Meta case, while also signalling that a settlement was unlikely.
Zuckerberg is expected to testify during the trial, which could run until as late as July this year.
The sources: The Hill, Wired, Meta court filing
