Mark Zuckerberg on Jan. 31, 2024 on Capitol Hill. Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images
The Federal Trade Commission and Meta will square off in a long-awaited antitrust trial on Monday over the tech giant's past acquisitions of WhatsApp and Instagram.
Why it matters: The trial will be a major test of the FTC's ability to take on tech behemoths for allegedly breaking antitrust law and comes as Meta CEO Mark Zuckerberg tries to cozy up to President Trump.
- The case could result in Meta having to spin off WhatsApp and Instagram.
- If Meta wins, the company would be vindicated in its longtime argument that the two apps couldn't have thrived without the company's backing and that Meta has plenty of competition in the social networking space.
- The lawsuit's main question is whether Meta acted illegally in its WhatsApp and Instagram acquisitions, done in 2014 and 2012.
Federal judge James Boasberg will hear the case, which was first filed in December 2020 under Trump's first administration.
- A judge dismissed that original lawsuit in June 2021 for lacking sufficient evidence of Meta's market power.
- Under Lina Khan, FTC chair under President Biden, the case was re-filed and expanded in August 2021.
- Boasberg allowed that case to proceed in January 2022, and rejected a bid from Meta last year to have the case dismissed, paving way for this trial.
What they're saying: The FTC says Meta has illegally monopolized the market for "personal social networking services" through those acquisitions, in a bid to "neutralize" its rivals, per legal filings.
- "Acquiring these competitive threats has enabled Facebook to sustain its dominance—to the detriment of competition and users—not by competing on the merits, but by avoiding competition," the FTC wrote in a filing.
- Meta could have chosen to compete with then-upstart photo sharing app Instagram in 2012, a senior FTC official said on a call with reporters ahead of the trial, but instead it bought it, and did the same with WhatsApp.
The other side: "The FTC's lawsuit against Meta defies reality. The evidence at trial will show what every 17-year-old in the world knows: Instagram, Facebook and WhatsApp compete with Chinese-owned TikTok, YouTube, X, iMessage and many others," Meta spokesperson Chris Sgro said in a statement.
- "More than 10 years after the FTC reviewed and cleared our acquisitions, the Commission's action in this case sends the message that no deal is ever truly final."
- "Regulators should be supporting American innovation, rather than seeking to break up a great American company and further advantaging China on critical issues like AI."
What we're watching: The case could take eight weeks or more. There'll be a slew of high-profile witnesses, including Zuckerberg.
- Former COO Sheryl Sandberg, chief technology officer Andrew Bosworth, and WhatsApp and Instagram leadership past and present, will also testify, per court filings.
- Representatives from Snap, TikTok and Pinterest are expected to testify as well.
Our thought bubble: Tech firms have gotten much closer with Trump in his second term.
- But unless Trump tells the FTC to shut the whole trial down, Meta's overtures may not do the company any good here.
