FTC claimed Facebook bought WhatsApp and Instagram to avoid competition
The FTC claimed that Facebook, which changed its corporate name to Meta in 2021, acquired the two social media platforms to avoid having to compete with them. The FTC considered this to be a violation of anti-trust laws. The seven-week trial included testimony from Facebook/Meta founder, chairman, and CEO Mark Zuckerberg. During the trial, Zuckerberg argued that Meta has plenty of competition from other platforms including YouTube and TikTok.
Zuckerberg’s comments caught the attention of federal judge James Boasberg who wrote in his opinion that YouTube and TikTok prevent Meta from monopolizing social media. Boasberg also pointed out that the social media market has changed since the suit was filed by the FTC with the biggest change coming from AI. The judge wrote that content generated by AI negates the FTC’s arguments. “Meta holds no monopoly in the relevant market,” the judge wrote in his decision.
Judge writes that TikTok is Meta’s fiercest competitor
Boasberg’s ruling says that Meta apps are responsible for only a “modest share” of the time spent on social media which includes Facebook, Instagram, Snapchat, TikTok and YouTube (in alphabetical order). The judge says that this share is declining. He also says that even if YouTube’s share was excluded from the numbers, Meta still would not be a monopoly. In addition, Boasberg’s decision also said, “TikTok — which Meta considers its fiercest competitor — broke into the market only seven years ago … and has been oerrunning the market ever since.”
Both sides released statements following the decision. Meta Chief Legal Officer Jennifer Newstead said, “Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the Administration and to invest in America.”
The Instagram purchase is one of the most profitable tech acquisitions of all time
Joe Simonson, FTC Director of Public Affairs, stated, “We are deeply disappointed in this decision. The deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment. We are reviewing all our options.”
Blast from the pa
PhoneArena April 9, 2012. | Image credit-PhoneArena
The purchase of Instagram could be considered one of the most profitable tech acquisitions of all time. Instagram is currently estimated to have a valuation of $441 billion to $538 billion. Remember, Facebook paid $1 billion for it. At the time, it was known mostly for its disappearing messages. Soon, users started taking Instagram photos of their meals and sharing them with others. Instagram got a big shot in the arm when it took the Stories feature from Snapchat and it helped take the app to an incredibly high level of popularity.
This is a big win for Big Tech
Meta tried to show that a forced break up would have been deadly to the company. Instagram delivers ad revenue to Meta while WhatsApp gives Meta business subscribers and gets the company’s name out internationally. Zuckerberg, during the trial, let it be known that his first platform, Facebook, is losing popularity. Meta also had a good point as it argued that regulators had already approved the Instagram and WhatsApp deals years ago when they were originally proposed.
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