Meta Goes on Trial for Instagram Acquisition: ‘They Decided That Competition Was Too Hard'
The trial, held in the U.S. District Court of the District of Columbia, poses a significant threat to the $1.37 trillion tech juggernaut CEO Mark Zuckerberg has built. Zuckerberg, who founded Facebook in 2004, has created a social media empire that has stamped out competitors and violated antitrust law, the FTC has argued, due to its $1 billion purchase of Instagram in 2012 and its $19 billion acquisition of WhatsApp in 2014.
'Since at least 2012, Meta has enjoyed monopoly power in that market,' the FTC said in a court filing last year. 'The Commission further contends that Defendant unlawfully maintained that monopoly by acquiring two actual or nascent competitors, Instagram and WhatsApp, that posed a threat to its dominance at the time.'
Meta, which was still called Facebook when it went public in 2012, has seen its share price skyrocket more than 1,300% in the 13 years since its Wall Street debut. The company reported it had 3.35 billion people who use at least one of the apps within its 'family,' as Meta calls it, during the fourth quarter of 2024. That massive user base has helped make Meta into an advertising giant, with the company reporting $164.50 billion in sales last year — with about 96% of that stemming from its ad business.
That success has come as Meta has squashed any ability for real competitors to emerge in the social media space, according to the FTC.
'For more than 100 years, American public policy has insisted firms must compete if they want to succeed,' Daniel Matheson, the FTC's lead litigator, said in his opening remarks on Monday, per The New York Times. 'The reason we are here is that Meta broke the deal.'
Matheson added: 'They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them.'
His comments, made inside a jammed courtroom, occurred after quite a long road to get to this point; the FTC has been building its case since December 2020, first launching during the final days of President Trump's first term in office.
Meta has fought back against the FTC's antitrust claims, which the company said are 'weak' in a blog post from Jennifer Newstead, its chief legal officer, on Sunday. Newstead argued that the FTC's lawsuit is bogus because it conveniently ignores how Meta faces stiff competition for users' time from platforms like YouTube and TikTok.
'In order for the FTC to win this case, they need to prove both that Meta has a dominant share in a properly defined product market that includes all competitors, and that the two acquisitions harmed competition and consumers. They are wrong on both claims,' she wrote.
Newstead continued: 'That's why they've gerrymandered a fictitious market in which Facebook and Instagram compete only with Snapchat and an app called MeWe. In reality, more time is spent on TikTok and YouTube than on either Facebook or Instagram – if you only add TikTok and YouTube into the FTC's social media market definition, Meta has [less than] 30% market share.'
The Wall Street Journal reported earlier this month that Zuckerberg had been cozying up to President Trump in an effort to get the FTC case settled before trial. Zuckerberg was also prominently featured at the president's inauguration in January, alongside a who's who of other tech execs.
That push for a settlement obviously did not materialize, and Zuckerberg is now expected to be called as the first witness in the trial. What he has to say — as well as other prominent executives like Instagram co-founder Kevin Systrom — will be worth paying close attention to in the days and weeks ahead.The post Meta Goes on Trial for Instagram Acquisition: 'They Decided That Competition Was Too Hard' appeared first on TheWrap.
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