Still feeling uneasy about Meta’s acquisition of Instagram in 2012 and WhatsApp in 2014, the Federal Trade Commission will be appealing a November ruling that cleared Meta of allegations that it holds an illegal monopoly in a market dubbed “personal social networking.”
The FTC hopes the US Court of Appeals for the District of Columbia will agree that “robust evidence at trial” showed that Meta’s acquisitions were improper. In the initial trial, the FTC sought a breakup of Meta’s apps, with Meta risking forced divestments of Instagram or WhatsApp.
In a press release Tuesday, the FTC confirmed that it “continues to allege” that “for over a decade Meta has illegally maintained a monopoly in personal social networking services through anticompetitive conduct—by buying the significant competitive threats it identified in Instagram and WhatsApp.”
Meta can’t get in Trump’s good graces
Talking to press, FTC spokesperson Joe Simonson pointed out that the case against Meta originated during Donald Trump’s prior term, Reuters reported. Back then, Trump was frustrated with Facebook, claiming the company and its CEO, Mark Zuckerberg, were “anti-Trump” in 2017, the BBC reported. His frustrations only grew when Meta banned his Facebook and Instagram accounts in 2021.
Ahead of Trump’s second term, Zuckerberg has attempted to improve relations with Trump, donating $1 million to Trump’s inauguration fund in a move the BBC reported was intended to “repair his and his firm’s relationship with Trump.” Last January, Meta also paid Trump $25 million to settle lawsuits over his Facebook and Instagram suspensions, NPR reported.
But these moves don’t appear to have affected the FTC’s resolve to undo Meta’s alleged monopoly. On Tuesday, Simonson said the Meta crackdown remained a priority because the agency believes that “Meta violated our antitrust laws when it acquired Instagram and WhatsApp,” and “consequently, American consumers have suffered from Meta’s monopoly.”
For Meta, the renewed fight comes at a time when most tech companies are walking tightropes to avoid any possible retaliation from Trump, not just social platforms. After defeating the FTC last fall, Meta’s chief legal officer, Jennifer Newstead, didn’t dunk on the FTC but coolly celebrated the ruling for recognizing that “Meta faces fierce competition.” In the same breath, Newstead also seemed to want to take the opportunity to remind the Trump administration that Meta was a friend.
“Our products are beneficial for people and businesses and exemplify American innovation and economic growth,” Newstead said. “We look forward to continuing to partner with the Administration and to invest in America.”
Similarly, this week, Meta has offered a rather neutral response to the FTC’s announcement. Asked for comment on the FTC’s decision to appeal, Meta’s spokesperson simply told Ars that James Boasberg, the US district judge who sided with Meta, got it right the first time, then repeated one of Trump’s favorite refrains from tech companies.
“The District Court’s decision to reject the FTC’s arguments is correct and recognizes the fierce competition we face,” Meta’s spokesperson said. “We will remain focused on innovating and investing in America.”
FTC blamed judge for loss
Political tensions have remained at the center of the case, perhaps peaking after Boasberg’s ruling.
In November, Simonson criticized Boasberg, telling CNBC that “the deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment.”
That push to impeach Boasberg came from Republican lawmaker Brandon Gill, who alleged the judge was abusing his power to censor conservatives, but no actions have been taken since the proposed resolution was submitted to a House committee that month. Republicans, including Trump’s attorney general, Pam Bondi, have complained that Boasberg is a rogue partisan judge, but Boasberg so far has withstood their attacks while continuing to settle cases. Trump’s Truth Social tirades against the judge required a long fact-checking piece from PBS.
But the Meta case itself may be hard to win even with a judge that Republicans favor. Last year, the FTC had tried to argue that Meta faced no real competition in the personal social networking market, with only two rivals to speak of, Snapchat and an app called MeWe. But for social media users, Instagram and TikTok are interchangeable, Meta successfully argued, and that makes TikTok as much a rival as Snapchat, Boasberg agreed.
Additionally, Boasberg was not sold on the FTC’s argument that Meta was allegedly abusing its monopoly power and harming consumers by degrading the quality of the app while increasing ad loads. Rather, he agreed with Meta that the company had added many features “continuously” improving its apps.
Further, social media has changed so much since the days of Facebook competing for user engagement with Instagram that Boasberg emphasized that “the Court finds it impossible to believe that consumers would prefer the versions of Instagram and Facebook that existed a decade ago to the versions that exist today.”
As the FTC revives the case, a new judge will weigh Meta’s arguments, the general thrust of which is that social networking as it was known in the early days of Facebook is dead, making the FTC’s case moot.
It’s unclear whether a different judge will see Meta as a monopolist or if Boasberg was right to conclude that the days of grouping apps into “separate markets of social networking and social media” are over.
Originally published at Ars Technica
