Meta is back in court this week, and it's a throwback to the company's early days. This week CEO Mark Zuckerberg testified in an antitrust case brought by the Federal Trade Commission concerning the company's 2012 and 2014 acquisitions of Instagram and WhatsApp, respectively.
In the 2010s, Facebook was a big player in social media, but it wasn't the tech empire that Meta is today. Part of what made the company such a powerhouse was its timely purchase of Instagram for $1 billion. But that may have had a chilling effect on the social media landscape and boxed out competitors, according to the FTC's case.
"Facebook's course of conduct has eliminated nascent rivals," the first complaint for injunctive relief reads. By doing that, US social media users didn't have "the benefits of competition, including increased choice, quality, and innovation."
That claim is key in antitrust cases like these. Antitrust cases typically allege that companies are monopolizing a market, which can drive out competitors and put too much power in the hands of one company.
When asked for comment, a Meta spokesperson said that the FTC's case "defies reality" and pointed to a blog post from Meta's chief legal officer that says the company operates in a "dynamic and hypercompetitive space." The company points to platforms like YouTube and TikTok as posing steep competition to Meta currently. YouTube and Facebook are the two most widely-used social media platforms, according to 2024 data from the Pew Research Center.
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Zuckerberg's testimony this week has focused on the early days of its acquisition of Instagram. The FTC has submitted email evidence from Facebook execs citing their concerns about the growing threat mobile-friendly Instagram posed to the Facebook platform. Former Meta COO Sheryl Sandberg and one of Instagram's original co-founders, Kevin Systrom, are also listed as witnesses and could testify.
A number of antitrust cases have been brought against tech companies like Meta in the past few years. Most notably, Google's search business was ruled a monopoly by a federal judge in August 2024. Apple was also sued by the US Department of Justice and a coalition of states last year over claims that the company "make[s] it extremely difficult and expensive…to venture outside the Apple ecosystem." Amazon, too, was sued by the FTC and states in 2023 for using "anticompetitive and unfair strategies" to monopolize the online shopping market. All three of those cases are still ongoing.
Antitrust cases like this one are significant since they can have a massive impact on the platforms' future. Instagram and WhatsApp users shouldn't experience any service interruptions now because of the lawsuit, but it could dramatically alter Meta's future in the long run depending on the outcome. One possible outcome is that Meta could be forced to spin off its platform business from its AI and VR businesses, similar to one possibility for Google and its advertising business. That would be a problem for the company since it uses people's data from social media to train its AI models. But it could be great for folks who don't want to automatically have to share their data for AI training.
Social media today is pretty unrecognizable from Facebook's and Instagram's early days. Technologies like AI are amplifying ongoing issues around content moderation, privacy and misinformation. While the court dukes it out over whether Meta is legally a monopoly, there's no doubt Meta is a major player. Its policies and practices have tangible impacts on our everyday lives. The decisions of this case (and the other ongoing antitrust cases against big tech companies) are likely to predict how companies are able to operate in the future -- and the power we have as consumers in our digital experiences.
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