Meta Platforms Inc. has defeated a lawsuit from the Federal Trade Commission after a federal judge ruled that the tech giant’s acquisitions of Instagram and WhatsApp did not violate U.S. antitrust law.
The regulator’s lawsuit, initially filed five years ago, accused the tech giant of having a monopoly in social networking following its acquisition of WhatsApp and Instagram more than a decade ago.
Judge James Boasberg of the U.S. District Court in Washington, D.C. initially dismissed the case in 2021 for not having enough evidence to prove Facebook “holds market power.” The FTC would file an amended suit later that year and Boasberg would allow the case to proceed to trial.
But on Tuesday, Boasberg ruled that the agency yet again failed to prove its argument, noting that the landscape that existed when the suit was originally filed has”changed markedly” and that while it “once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down.” He noted that every time the court examined Meta’s apps, they had changed. He added that its competitors have too, with TikTok now holding “center stage as Meta’s fiercest rival.”
“With apps surging and receding, chasing one craze and moving on from others, and adding new features with each passing year, the FTC has understandably struggled to fix the boundaries of Meta’s product market. Even so, it continues to insist that Meta competes with the same old rivals it has for the last decade, that the company holds a monopoly among that small set, and that it maintained that monopoly through anticompetitive acquisitions,” Boasberg explained. “Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The Court’s verdict today determines that the FTC has not done so.”
In his decision, Boasberg said that Instagram, WhatsApp, TikTok and YouTube have “evolved to have nearly identical” features and that the evidence “resoundingly shows” that users treat TikTok and YouTube as alternatives to Meta’s apps. He added that TikTok and YouTube “compete fiercely over a meaningful share of Meta’s business,” noting that the latter’s market share is less than 50% when look at time spent.
“The court ultimately finds that YouTube and TikTok belong in the product market, and they prevent Meta from holding a monopoly. Even if YouTube is out, including TikTok alone defeats the FTC’s case,” he wrote.
More to come…
