FTC vs Meta: High-Stakes Antitrust Battle Commences in Washington

In what is looking to be a pivotal occurrence for the oversight of companies in our digital time, the umbrella company of Facebook, Instagram, and WhatsApp, Meta Platforms, this week stepped into a Washington, D.C. courtroom to respond to antitrust charges leveled against it by the Federal Trade Commission (FTC). The FTC alleges that, far from being the forward-looking, innovative company it likes to portray itself as, Meta is a digital-age monopolist and has become so, in part, by buying up companies that might otherwise have posed serious competition to it.

Meta has faced no more serious legal challenge in its nearly two-decade history than the trial that commenced on April 14. Should the case brought by the Federal Trade Commission and its lawyers prove successful, it could compel Meta to divest two of its most significant recent acquisitions, Assets that have been crucial to its current business model.

FTC's Core Argument: Innovation or Elimination?

At the start of the arguments, the FTC claimed that when Meta acquired other companies, it was not really trying to grow but was instead trying to kill off the threats that these companies posed to it. The FTC's lead attorney, Daniel Matheson, told the judge that the question of whether or not Meta is innovative is not at issue here. What is at issue, according to Matheson and the FTC, is the apparently preferred path of acquiring innovation instead of competing and how that has allowed Meta to create and maintain its dominant position in the space where people socialize with each other using digital tools.

The government's aim is not just to disassemble the company's assets but to reach far beyond that to demand much more transparency and a far deeper level of oversight for Meta's future purchases.

Meta’s Defense: Growth and Free Access

Meta's legal team, helmed by attorney Mark Hansen, countered the monopoly claims, noting that both Instagram and WhatsApp have blossomed under Meta's aegis. They argued that the FTC's case lacks a legitimate basis, underscoring that the two services are free and continue to enhance their offerings. Hansen went further, stressing that the no-fee model in the context of the alleged monopoly is significant, and that using their impressive scale to enhance and spread the two platforms is, too.

According to Meta, its business model encourages innovation and does not suppress it. The company's acquisitions, it argues, were in line with standard practice in the tech industry, and were part of a strategy that, too, is an industry standard: to integrate acquired companies into the larger business.

A Trial That Could Reshape Tech Regulation

The trial, expected to last several weeks, is under the direction of U.S. District Judge James Boasberg and features some high-profile testimony, including that of Meta CEO Mark Zuckerberg; former COO Sheryl Sandberg; and Instagram co-founder Kevin Systrom. This legal face-off is fueled by a lawsuit the FTC first lodged against Facebook in 2020, which got a new lease on life after the agency jury-rigged a couple of its own internal complaints to make them look more complaint-like.

The way this case turns out could change how U.S. authorities go after Big Tech for mergers. It could change the way they see those mergers in terms of antitrust laws. If the authorities view the mergers more aggressively than they have in the past, it could force Big Tech to operate more in line with those laws. This could set a new standard for antitrust enforcement.