Meta, the social media giant, is set to appear in court on Monday, facing allegations from the US government that it misused its market dominance to acquire Instagram and WhatsApp before they had a chance to become challengers.
Proceeding with the trial in a federal court in Washington undermines Meta’s CEO Mark Zuckerberg’s hope that Donald Trump’s return to the presidency would prompt a relaxation in the government’s enforcement of antitrust laws against major tech firms.
The Federal Trade Commission (FTC), a powerful consumer protection agency in the US, brought the case against Meta. It could result in Facebook’s owner being required to sell Instagram and WhatsApp, which have become significant global entities since being acquired.
Judge James Boasberg will oversee and make a ruling on the trial, which coincides with another high-profile case related to the White House’s decisions about deportations of Venezuelans using wartime legislation.
The case against Meta was initially filed in December 2020, during Trump’s first term. Many have wondered whether Trump would instruct the FTC to back down.
Zuckerberg, one of the wealthiest individuals globally, has made numerous trips to the White House, hoping to persuade the current US leader to pursue a settlement rather than litigation, a move that would be remarkable at this point in the proceedings.
FTC Chair Andrew Ferguson dismissed the likelihood of such a settlement, stating to The Verge, “I would be very surprised if anything like that ever happened.”
To influence the situation, Zuckerberg supported Trump’s inauguration fund and altered content moderation policies, in addition to acquiring a $23 million home in Washington to be nearer to political activity.
The lawsuit against Meta is only one of five significant antitrust cases recently initiated by the US government against technology companies. Google is currently involved in two lawsuits and was found guilty of abusing its dominance in the search market last August, while Apple and Amazon also face legal challenges.
The trial is expected to last at least eight weeks, during which Zuckerberg, his former associate Sheryl Sandberg, and several executives from competing firms will testify.
At the heart of the case is Facebook’s $1 billion purchase of Instagram in 2012. Although initially a small and promising photo-sharing platform, Instagram now has two billion active users.
An email from Zuckerberg referenced by the FTC indicates that he viewed Instagram’s potential rise as “really scary,” which is why he considered “paying a lot of money for this.”
The FTC maintains that Meta’s acquisition of WhatsApp for $19 billion in 2014 followed a similar strategy, as Zuckerberg worried the messaging platform could evolve into a social network or be acquired by a rival.
Meta’s defence lawyers will contend that their substantial investments turned these acquisitions into the successes they are recognized as today. They will also point out that Meta’s applications are free for consumers and face intense competition.
The FTC claims that Meta’s monopolistic influence is reflected in a significantly reduced user experience, characterized by excessive advertisements and changes to products that users are forced to accept.
