The US Federal Trade Commission is taking Meta, Facebook’s parent company, to court over its acquisition of Instagram and WhatsApp, alleging that the deals created an illegal social media monopoly.
The US Federal Trade Commission (FTC) is taking Meta, Facebook‘s parent company, to court over its acquisition of ‘Instagram and WhatsApp‘ . The case, which began during Donald Trump‘s first term as President, seeks to unwind the deals and force Meta to restructure or sell parts of its business.
Meta, previously named Facebook, Inc., is a technology company that operates several well-known platforms.
Its primary functions include developing and providing online products and services.
These include social media, messaging, and advertising technologies.
Founded in 2004 by Mark Zuckerberg, the company's name change to Meta in 2021 reflects its expansion into virtual reality and the metaverse.
With over 2.7 billion monthly active users across its platforms, Meta plays a significant role in shaping online interactions.
The FTC’s Case Against Meta
The FTC claims that Meta built an illegal social media monopoly by spending billions of dollars to acquire ‘Instagram and WhatsApp’ . The agency alleges that these acquisitions aimed to eliminate nascent competitors who could threaten Facebook‘s status as the go-to social media platform for users to connect with friends and family.
The Federal Trade Commission (FTC) is an independent agency of the US government responsible for protecting consumers from unfair or deceptive business practices.
Established in 1915, the FTC enforces federal laws regulating competition, trade, and consumer protection.
Its primary functions include investigating complaints, conducting market research, and issuing guidelines to prevent anticompetitive conduct.
The FTC also provides education and outreach programs to inform businesses and individuals about their rights and responsibilities under federal law.
According to the FTC, Meta holds a monopoly on platforms used to share with friends and family, where its main competitors in the United States are Snap‘s ‘Snapchat‘ and MeWe. The agency argues that platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube, and Reddit, are not interchangeable.
The Consequences of a Meta Loss
Losing Instagram would be a devastating blow to Meta, which earns about half of its US advertising revenue from the platform. According to ‘Emarketer’ , Instagram generates $37.13 billion in revenue this year alone, making it Meta‘s biggest money maker in the US.
The trial poses an existential threat to Meta, which has been making regular overtures to President Trump since his election. The company has donated millions of dollars to Trump‘s inauguration and has unsuccessfully attempted to persuade the president to settle the case against Meta during meetings at the White House.
The Trial: A High-Stakes Test for the FTC
The trial is scheduled to stretch into July, with Meta CEO Mark Zuckerberg expected to testify about his past statements regarding the acquisitions. The FTC claims that Zuckerberg proposed acquiring ‘Instagram‘ in 2012 as a way to neutralize a potential Facebook competitor and expressed worry that WhatsApp could grow into a social network.
The trial will likely focus on how users spend time on social media and whether they consider the services interchangeable. Meta will point to an increase in traffic to Instagram and Facebook during TikTok‘s brief shutdown in the United States as evidence of competition.
The Ramifications of the Trial
The trial could have far-reaching consequences for the social media industry, according to ‘Forrester‘s vice-president of research, Mike Proulx’ . ‘The ramifications of this trial coupled with TikTok’s future in limbo potentially puts the very core of the social media market at play,’ he said.
Social media has revolutionized the way people interact, communicate, and access information.
With billions of users worldwide, social media platforms have become an essential part of modern life.
Facebook, Instagram, Twitter, and LinkedIn are among the most popular platforms, with over 4 billion people using them every month.
The social media industry is projected to reach $800 billion by 2025, driven by increasing mobile adoption, online shopping, and digital marketing.
If the FTC wins, it would have to prove at a second trial that measures such as forcing Meta to sell Instagram or WhatsApp would restore competition. Losing Instagram in particular could prove catastrophic to Meta‘s bottom line.
The case is being closely watched by regulators and industry experts, who are eager to see how the social media landscape will evolve if Meta loses. As ‘Forrester’s Mike Proulx’ noted, ‘No longer would Meta be its centre of gravity. We’d likely see a renaissance of social media startups looking to grab a piece of new social media world order.’
