The U.S Federal Trade Commission (FTC) is reportedly in pursuit to dismantle tech giant, Meta’s dominance in the social media landscape.
In a legal filing, the FTC claims that Meta shouldn’t have been allowed to purchase Instagram for $1 billion in 2012, and WhatsApp for $19 billion in 2014, calling for those units to be sliced off from the company.
Part of the filing reads,
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“Facebook is the world’s dominant online social network, with a purported three billion-plus regular users. Facebook has maintained its monopoly position in significant part by pursuing Chief Executive Officer (“CEO”) Mark Zuckerberg’s strategy, expressed in 2008: “It is better to buy than compete.” True to that maxim, Facebook has systematically tracked potential rivals and acquired companies that it viewed as serious competitive threats.
“Facebook supplemented this anticompetitive acquisition strategy with anticompetitive conditional dealing policies, designed to erect or maintain entry barriers and to neutralize perceived competitive threats. Facebook’s dominant position provides it with staggering profits. Facebook monetizes its social networking monopoly principally by selling surveillance-based advertising. Facebook collects data on users both on its platform and across the internet and exploits this deep trove of data about users’ activities, interests, and affiliations to sell behavioral advertisements.
“Last year alone, Facebook generated revenues of more than $85 billion and profits of more than $29 billion. As Facebook has long recognized, its social networking monopoly is protected by high barriers to entry, including strong network effects. In particular, because a personal social network is more valuable to a user when more of that user’s friends and family are already members, a new entrant faces significant difficulties in attracting a sufficient user base to compete with Facebook.“
After nearly six years of investigation and legal maneuvering, the Federal Trade Commission (FTC) is finally facing off against Meta in a high-stakes antitrust trial that could redefine the future of the social media landscape. If the FTC prevails, Meta could be forced to unwind the acquisitions splitting off Instagram and WhatsApp from its corporate structure, a move the tech giant strongly opposes.
The trial, expected to stretch over several weeks, will feature testimony from high-profile figures including Zuckerberg himself, former COO Sheryl Sandberg, Instagram co-founder Kevin Systrom, and executives from rival platforms such as TikTok, Snap, and YouTube. The FTC argues that Meta’s dominance wasn’t earned through innovation, but through strategic acquisitions that eliminated competitive threats.
“Acquiring these competitive threats has enabled Facebook to sustain its dominance—to the detriment of competition and users not by competing on the merits, but by avoiding competition,” the agency stated in a legal filing.
Meanwhile, Meta maintains that its acquisitions were lawful and approved by regulators at the time. The company points to the current vibrancy of the social media market with TikTok, Snapchat, and others thriving as evidence that competition is alive and well. Meta spokesman Chris Sgro argued that the deals have “been good for competition and consumers,” and criticized the FTC’s attempt to “punish businesses for innovating.”
Legal experts see the case as a defining moment for U.S. antitrust enforcement. Prasad Krishnamurthy, a professor at U.C. Berkeley Law, noted that the trial could test the limits of existing antitrust laws concerning mergers and acquisitions. “It’s a big case because it involves Meta, a social media giant, and it involves one of the most important markets in the world,” Krishnamurthy said. “It has big implications for something that consumers use as part of their daily life, Instagram and WhatsApp.”
Amid the legal battle, political undertones have also emerged. FTC Chair Lina Khan recently expressed concerns that the Trump administration might go easy on Meta, given Zuckerberg’s recent engagements with the former president including attending his inauguration and co-hosting an inaugural ball.
As the trial unfolds, it could set a powerful precedent for how the U.S. handles Big Tech and corporate consolidation in the digital age.