FTC goes for round two to break Meta's monopoly

The US Federal Trade Commission said it will challenge a judge’s decision from November that sided with Meta Platforms Inc. over its purchases of Instagram and WhatsApp.

Judge James Boasberg said the deals for the photo-sharing app and messaging service didn’t break antitrust laws. He found the social networking company didn’t illegally control the market because it competes with Alphabet Inc.’s YouTube and TikTok.

FTC spokesperson Joe Simonson stood by the agency’s case. “Meta violated our antitrust laws when it acquired Instagram and WhatsApp,” he said. He pointed to 2020, when the agency first filed the case during the first Trump administration, saying “the staggering market power was on full display for everyone to see.”

Meta spokesperson Christopher Sgro said the district court got it right and “recognizes the fierce competition we face.” He said the company would “remain focused on innovating and investing in America.”

The ruling was a big loss for the FTC, which filed the lawsuit in 2020 trying to break up the company. The agency filed a notice of appeal Tuesday and will file its full arguments later.

A senior agency official, who didn’t want to be named, told Bloomberg that the FTC thinks Boasberg looked at competition today instead of the market back when the lawsuit started. The official said that even now, Meta’s Instagram doesn’t really compete with YouTube or TikTok.

FTC failed to prove monopoly power before

In his November decision, Boasberg wrote that the FTC had a hard time defining Meta’s product market because “apps surge and recede, chase one craze and move on from others, and add new features with each passing year.” He said the agency didn’t prove Meta holds monopoly power now.

Meta Chief Legal Officer Jen Newstead was happy with the decision, saying it “recognizes that Meta faces fierce competition.” She called the company’s products beneficial and said they show American innovation and economic growth.

The FTC’s original case said Meta, which used to be called Facebook Inc., bought the two companies in 2012 and 2014 so it wouldn’t have to compete with them. The agency said these purchases strengthened Meta’s monopoly in social networking for friends and family connections.

Meta argued its competitors go way beyond traditional friends and family sharing. The company includes short-form video, commerce and private messaging. Meta brought in people from Reddit Inc., X, TikTok and Pinterest Inc. to talk about how their platforms compete for user time and attention, which means advertising money.

Boasberg said TikTok, YouTube identical to Meta apps

Boasberg didn’t buy the FTC’s claim that Meta’s Facebook and Instagram are mainly for personal social networking while TikTok and YouTube are video entertainment apps. He wrote that the four platforms have “evolved to have nearly identical” features, and evidence “resoundingly shows” users see TikTok and YouTube as alternatives to Meta’s apps.

This case is one of five major antitrust lawsuits filed by the FTC or Justice Department against the world’s biggest technology platforms. Two federal judges already ruled that Alphabet Inc.’s Google illegally monopolized online search and advertising markets, while cases against Amazon.com Inc. and Apple Inc. are still pending.

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