While Big Tech zips, regulators slog

In the year it took the Federal Trade Commission to get a judge to green-light its antitrust suit against Facebook this week, Facebook has already changed its name and shifted its focus.

Why it matters: Tech firms and Beltway regulators not only see issues differently but also operate on wildly different scales of time — with DC's glacial pace often leaving it at a deep disadvantage in its quest to limit tech giants' power.

Driving the news: Facebook, now Meta, Tuesday lost a bid to dismiss the FTC's antitrust case, which alleges the firm pursued a scheme to "buy or bury" competitors by purchasing Instagram and WhatsApp.

The timeline: The FTC's suit will now move to a trial that could stretch out for many years, like similar previous government litigation against Microsoft in the '90s and IBM in the '70s.

• The trial's discovery portion — which involves combing through mountains of documents and evidence — could easily take a year by itself, said Joel Mitnick, a partner for antitrust and global litigation groups at Cadwalader, Wickersham & Taft and former FTC trial lawyer.
• Either side can move for a summary judgment, a quicker ruling by the judge that bypasses a full trial.
• Any trial outcome can, and usually does, get appealed.

Meanwhile, Meta can keep buying smaller companies and investing in new lines of business as it wishes.

The legal process is slow, in part, because the stakes are so high.

• Antitrust decisions that go against corporate giants are rare, but — like the 1982 breakup of AT&T — they reverberate for decades.
• The FTC suit — along with the Justice Department's antitrust case against Google — is a "principal, landmark antitrust action," said Daniel Francis, former deputy director of the FTC competition bureau and a lecturer at Harvard Law School.
• It's not only about Meta/Facebook "but will also help clarify the rules for acquisitions of nascent or emerging competitors by firms throughout the economy — not just Big Tech companies," Francis said.

The other side: Facebook acquired Instagram in 2012 and WhatsApp in 2014 — both long ago — causing some on the industry side to cry foul.

• The agency shouldn't be "going back in time," Michael Brown, general partner at Battery Ventures, told Axios. "That has a chilling effect on businesses' ability to make decisions for the long term."

• Instead, he argued, "the FTC and DOJ should do their part in adjudicating a merger at the time it's proposed."

Between the lines: The shadow litigation can cast on a company's operations — like the threat of new legislation or regulation — can spur businesses to make voluntary defensive changes much faster than a trial.

• Meta, for its part, has made dozens of changes in response to regulatory threats, including changes to its algorithm, its use of facial recognition, its connection of Facebook accounts to Oculus devices and its rules for political advertising.

Reality check: The FTC faces what the judge in the case called "a tall task down the road in proving its allegations" — but if it wins, Facebook could be forced to divest Instagram and WhatsApp.

• "We'd have new players with massive scale within the online economy, who would then have the opportunity to pursue entry into different lines of business, including in competition with Facebook itself," said Francis.

Editor's note: This story has been corrected to identify Michael Brown as general partner of Battery Ventures, rather than its CEO.