Meta's antitrust trial begins when the FTC believes companies build social media monopoly
The Federal Trade Commission accused Meta of establishing a monopoly that began a landmark antitrust trial by buying startups in a way that could tear down a social media empire that changed the connections between the world online.
In a packed court in the U.S. District Court in the District of Columbia, the FTC opened its first antitrust trial under the Trump administration, saying that Mehta illegally consolidated the monopoly of social networks by obtaining Instagram and WhatsApp when they were small startups. The FTC said the actions are part of a “buy or bike strategy.”
Ultimately, procurement combines Mehta's power, depriving consumers of other social network options and eliminating competition, the government said.
“For more than 100 years, U.S. public policy has insisted on competing,” said Daniel Matheson, the FTC's chief litigant, in his opening remarks. “The reason we're here is that Meta broke the deal.”
“They think competition is too difficult and it's easier to buy out their competitors than to compete with them,” he added.
Trial – FTC v. Home Platform – posed the most important threat to the company's co-founder Mark Zuckerberg's business empire. If the government succeeds, the FTC will likely ask Meta to divest Instagram and WhatsApp, potentially changing the way Silicon Valley does business and changing the long-term model for big tech companies to snap up young competitors.
Still, legal experts warn that the FTC victory could be challenging. That's because the government has to prove something agnostic: without the acquisition, the Monopoly, formerly known as Facebook, would not have had the same success. Legal experts say mergers approved a few years ago are also extremely rare.
“One of the most difficult things about antitrust laws is when industry leaders buy small potential competitors,” said Gene Kimmelman, a former senior Justice official at the Obama administration. He added: “Meta buys a lot of things that are not flooded or integrated. How is Instagram different from WhatsApp?”
This effort lasted for a year a bipartisan pursuit to undermine the tremendous power of communication among a handful of tech companies in business, ideas, entertainment and political discourse. Despite attempts by tech executives to hold a trial with Trump, his antitrust appointment says they will continue the course.
The FTC’s case against META is the third major technical antitrust lawsuit in the past two years. Last year, the Justice Department won an antitrust case against Google to monopolize internet search. Next week, a federal judge will hear debates about remedies, including a potential breakup. The Justice Department also completed a separate trial against Google's monopoly advertising technology, which is still decided by a federal judge.
The Justice Department also sued Apple and the Federal Trade Commission sued Amazon, accusing the companies of violating antitrusts. The trials are expected to begin next year.
The case against META could affect its 3.5 billion users, who log in to Facebook, Instagram or WhatsApp multiple times a day to get news, shopping and text. Instagram and WhatsApp have attracted more users in recent years as Meta's flagship app Facebook has stopped growing.
FTC Chairman Andrew Ferguson listened to the government's opening speech in court. Meta's chief legal officer Jennifer Newstead and its chief global affairs officer Joel Kaplan also attended the meeting.
The case presided over Judge James Boasberg, 62, is a senior judge in the federal court. He has turned down the national focus by turning down the Trump administration’s efforts to use powerful wartime regulations to immediately see it as Venezuelan immigrants seen as members of violent street gangs.
Judge Boasberg said he was never a user of the Meta app but was familiar with Facebook Live, which has been introduced in a criminal trial.
During the expected eight-week trial period, the government and Yuanyuan will tell a competitive version of the company's 20-year growth story.
The FTC's argument depends on Section 2 of the Sherman Antitrust Act of 1890, which prohibits companies from maintaining monopoly through anti-competitive practices.
The FTC accuses Facebook of being known for its efforts to build a mobile app and fears Instagram will quickly become more popular. The FTC believes the company paid a high salary when it bought Instagram for $1 billion in 2012.
The government said that with WhatsApp growing, Meta proposed to buy the company for $19 billion in 2014, which is also far above its market value.
The FTC plans to highlight paper trials of emails between Meta-executives, along with other evidence that the company has purchased startups due to threats.
The government will call together witnesses from Meta as well as competitors, venture capitalists, economists and executives in the media industry. Mr. Zuckerberg is expected to be called as the first witness immediately on Monday. Former COO Sheryl Sandberg and Instagram co-founder Kevin Systrom will testify this week, the FTC said.
