Meta CEO Mark Zuckerberg could be forced to sell off Instagram and WhatsApp if he loses a landmark antitrust trial in America.
After a six-year investigation, the US Federal Trade Commission is alleging that Meta’s acquisition of the two apps, over a decade ago, crushed competition in the social-media tech industry and were “the actions of a monopolist guarding his turf”, said The New York Times.
What is the case against Meta?
Lawyers for the FTC argue that Meta unlawfully quashed rivals by overpaying for the acquisitions – $1 billion (£756 million) for Instagram in 2012 and $19 billion (£14 billion) WhatsApp in 2014 – leaving consumers without “reasonable alternatives” to the company’s platforms.
“They decided that competition was too hard, and it would be easier to buy out their rivals than compete with them,” said FTC lawyer Daniel Matheson. Yesterday in court, Matheson referenced a 2012 memo from Zuckerberg in which the Facebook founder discussed the importance of “neutralising” Instagram. Matheson called the message “a smoking gun”.
Meta’s lawyer, Mark Hansen, countered that the FTC’s case was a “grab bag” of theories that are “at war with the facts and at war with the law”. He accused the FTC of ignoring the competitive impact of TikTok on the social-media marketplace, and said that “acquisitions to improve and grow” have never been unlawful.
Could Donald Trump intervene in the case?
The case “risks becoming politicised” as it reaches court, said the BBC. The US president “looms unusually large” over the trial, “with antitrust observers in Washington fretting that Donald Trump will intervene at some point – most likely on Meta’s behalf”, said Politico.
The FTC has, historically, “operated independently of the White House”. But the current FTC head, Andrew Ferguson, is “Trump’s newly installed pick” and, last month, the president “purged” two of the FTC’s Democrat commissioners. This “has given Trump unprecedented influence over the agency”.
Zuckerberg has also been working hard to curry favour with Trump. Meta scrapped the fact-checking service on Facebook and Instagram, and donated $1 million (£756,000) to Trump’s inaugural fund. Zuckerberg himself has visited the White House three times since the start of Trump’s second term, the Wall Street Journal said.
What if Meta loses?
The stakes are definitely high. “If the FTC wins, Meta could be forced to break itself apart and spin off WhatsApp and Instagram”, said CNN. This “would upend the company’s core digital advertising business and reshape the broader social media ecosystem”.
It would also break up a $1.4 trillion (£1 trillion) company – something that “hasn’t been attempted at such a scale since telephone monopoly AT&T was broken up 40 years ago” in a “historic pushback on excessive corporate power”, said Politico.
In truth, though, the case “largely deals in hypotheticals”, said The New York Times. At the time of the WhatsApp and Instagram acquisitions, it would have been impossible to predict how technology would progress or what would happen if the acquisitions hadn’t gone through. That makes the case against Meta, “one of the most slippery in a tech industry that has long been defined by unpredictability”.
Court ruling could break up the social media giant but will Trump intervene on Meta’s behalf?
