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The U.S. Federal Trade Commission claims that by acquiring WhatsApp and Instagram, Meta aimed to eliminatecompetitors who could threaten Facebook's status as thego-to social media platform.
FTC claims that in acquiring the two platforms, Meta aimed to eliminate competitors
Thomson Reuters
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Mark Zuckerberg, the CEO of Meta Platforms,took the standon Monday at a high-stakes trial in Washington over claims by U.S. antitrust enforcers thatthe company spent billions ofdollars to acquire Instagram and WhatsApp to fend off Facebookcompetitors.
The U.S. Federal Trade Commission (FTC) argues that the Metaacquisitions from more than a decade ago were done to eliminatecompetitors who could threaten Facebook's status as thego-to social media platform for users to connect with friendsand family.
If the commission's claim is upheld,Meta could be forced to hive off Instagram and WhatsApp from its operations.
Wearing a dark suit and light blue tie, Zuckerbergcalmly responded to questions while working to combatallegations about Meta's motive in buying the companies.
Zuckerberg emphasized that friends and family sharing wasonly one priority for the app along with discovering othercontent.
In fact, a 2018 decision to prioritize Facebook content shared by users' friends over video postsand other public content failed to grasp a shift toward userssharing that content via messages instead of posting lifeupdates in their feeds, Zuckerberg said.
"I think we misunderstood how social engagement onlinewas evolving," Zuckerberg said.
"People just kept on engaging with more and more stuff thatwasn't what their friends were doing," he said.
The case poses an existential threat to Meta, which by someestimates earns about half of its U.S. advertising revenue fromInstagram. It alsogives the public its first real measureof how strongly the new Trump administration will follow up onits promises to take on Big Tech.
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Competition with TikTok
The FTC has pointed to emails in which Zuckerberg proposedacquiring the photo-sharing Instagram app as a way to neutralize apotential Facebook competitor, and expressed worry that encryptedmessaging service WhatsApp could grow into a social network.
Meta has argued that its purchases ofInstagram in 2012 and WhatsApp in 2014 have benefited users, andthat Zuckerberg's past statements are no longer relevant amidfierce competition from ByteDance's TikTok, Google's YouTube andApple's messaging app.
How users spend time on social media — and whether theyconsider the services interchangeable—will be core to the case.Meta will point to an increase in traffic to Instagram andFacebook during TikTok's brief shutdown in the United States inJanuary as evidence of competition.
The FTC claims Meta holds a monopoly on platforms used toshare with friends and family. Its main competitors in theUnited States are Snap's Snapchat and MeWe, a tiny, privacy-focused social media app launched in 2016.
Platformswhere users broadcast content to strangers based on sharedinterests, such as X, TikTok, YouTube and Reddit, arenot interchangeable, the FTC has argued.
U.S. District Judge James Boasberg said in a ruling inNovember that while the FTC has enough evidence to move forward,the agency "faces hard questions about whether its claims canhold up in the crucible of trial."
The trial could stretch into July. If the FTC wins, it would have to separately prove that measures such as forcing Meta tosell Instagram or WhatsApp would restore competition.
Instagram especially valuable to Meta
Losing Instagram in particular could prove catastrophic toMeta's bottom line.
While Meta does not release app-specific revenue figures,advertising research firm Emarketer forecast in December thatInstagram would generate $37.13 billion this year, a little overhalf of Meta's U.S. ad revenue.
Instagram also generates more revenue per user than anyother social platform, including Facebook, according toEmarketer.
WhatsApp to date has contributed only a sliver to Meta'stotal revenue, but it is the company's biggest app in terms ofdaily users,and is ramping up efforts to earn money off tools likechatbots. Zuckerberg has said such "business messaging" servicesare likely to drive the company's next wave of growth.
The case is one of five where the FTC and U.S. Department ofJustice accuse Big Tech companies of maintaining illegalmonopolies.
Amazon and Apple are both being sued, andAlphabet's Google is facing two lawsuits, includingone where a trial is set to begin next week on the government'sbid to force Google to sell its Chrome browser.
Trump vs. big tech
The case is part of a crackdown on Big Tech started duringTrump's first administration.
Meta has been making regular overtures to Trump since hiselection, nixing content moderation policies Republicans saidamounted to censorship and donating $1 million to Trump'sinauguration. Zuckerberg has also visited the White Housemultiple times in recent weeks.
LISTEN | CBC's Front Burner discusses antitrust cases against Google: Front Burner24:43The case against Google
Amazon, Apple and Alphabet's Google alsoface antitrust lawsuits by U.S. enforcers.
Several major tech companies have moved to align with Trumpsince the election, such as by rolling back diversityinitiatives and having executives engage directly with the WhiteHouse.
While a shift from the combative tone the companies tookduring Trump's first term, it has not resulted in a pullback onthe antitrust cases.
With files from the Associated Press
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