Meta (then known as Facebook) acquired the photo-sharing startup Instagram in 2012 for $1 billion, and two years later, bought WhatsApp for approximately $22 billion.
The FTC, the United States’ antitrust enforcement agency, now wants Judge James Boasberg to hold Mark Zuckerberg’s tech giant accountable for these mega-deals, which it claims were executed to unlawfully maintain a monopoly in social media. The FTC is calling on Boasberg to restore competition by forcing Meta to divest these assets. If successful, this could discourage large tech companies from acquiring startups in the future, effectively cutting off one of the most important sources of innovation and returns for venture capital investors. However, the process will be anything but swift. The initial hearing alone could last up to 37 days and will not conclude before July. Any appeal against the eventual ruling could take several more years. In other words, WhatsApp and Instagram will not be up for sale any time soon. Still, the potential loss of these two valuable platforms helps explain why Mark Zuckerberg reportedly approached a last-minute agreement with Donald Trump and White House officials with deep mistrust.
In any case, the FTC now has to clearly prove that Facebook has long held a monopoly in “personal social networking services in the United States.” This market category, which the FTC claims Facebook dominates, includes platforms like Snapchat and the lesser-known MeWe but excludes YouTube, TikTok, and other platforms that focus more on viewing creators’ videos than on following family and friends. Between 2012 and 2020, Facebook reportedly captured over 80 percent of users’ time within this narrowly defined market each year.
Zuckerberg’s primary defense is that the FTC has defined the market too narrowly. Meta argues that many social apps, including TikTok and YouTube, are in fact competitors to Facebook. If these platforms are included, Facebook can no longer be seen as a monopoly, the company claims. If that argument does not lead to an immediate victory, Meta’s secondary line of defense is that the FTC has failed to prove that consumers and advertisers have been harmed by Meta’s ownership of Instagram and WhatsApp—a key requirement for the FTC’s case. Meta argues that the apps would not be as successful today without its guidance. “The FTC must prove that, absent the acquisitions, consumers would have had more (or better) options sooner,” the company’s lawyers wrote in court filings last week. “Meta respectfully submits that the FTC cannot produce evidence sufficient to meet its burden.”
Still, the outcome of the trial will be hard to predict until testimonies begin in the coming weeks from current and former Meta executives—such as Zuckerberg and Sheryl Sandberg—as well as antitrust experts and competitors. According to Gavil, a law professor at Howard University, the FTC appears to be at a disadvantage. He believes the harm to consumers and advertisers from the acquisitions is more ambiguous than ideal for an antitrust case.