The U.S. Federal Trade Commission (FTC) kicked off its antitrust trial against Meta on Monday, accusing the tech giant of allegedly creating an illegal monopoly.
Meta CEO Mark Zuckerberg took the stand Monday in a courthouse in the U.S. District Court for the District of Columbia as the first witness in the trial. The FTC is claiming that Meta has a monopoly on the “personal social networking” market after buying competitors, including Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014.
Zuckerberg was confronted with an email he sent in 2011 about Instagram “growing quickly” and another email he sent in 2012 about Facebook taking “too long to catch up” to Instagram.
The emails were “written by someone who recognized Instagram as a threat and was forced to sacrifice a billion dollars because Meta could not meet that threat through competition,” the FTC’s lead lawyer Daniel Matheson alleged in court.
Zuckerberg defended his statements on Monday, saying that the emails were “relatively early” discussions about buying Instagram and that he wanted to buy Instagram for its camera technology, not for its social network.
Meta CEO Mark Zuckerberg. Photo by Andrew Harnik/Getty Images
Zuckerberg is expected to take the stand again on Tuesday. The FTC plans to call Instagram Head Adam Mosseri and former Meta Chief Operating Officer Sheryl Sandberg to the stand over the coming weeks.
The trial could stretch for up to two months.
Why Is Meta on Trial?
The FTC alleges that Meta broke competition law by acquiring Instagram and WhatsApp and stated that the acquisitions were part of an effort to minimize competition and maintain monopoly power. The government accused Meta of employing an illegal “buy-or-bury strategy” with rivals and either acquiring them, as it did with Instagram, or attempting to put them out of business, as it allegedly does with Snapchat.
Meta countered the claims by pointing out that antitrust regulators reviewed its purchases of WhatsApp and Instagram when they happened and “correctly allowed these deals to move forward because they did not threaten competition.”
Meta’s social media offerings are free to use, so the FTC will not be able to show that Meta’s alleged monopoly resulted in higher prices for consumers. Instead, the agency will demonstrate that the Instagram and WhatsApp acquisitions harmed consumers through more ads and fewer privacy protections, per Politico.
If the FTC successfully convinces the court that Meta’s acquisitions of Instagram and WhatsApp were illegal, the court could try to break Meta apart and force it to sell or spin off Instagram and WhatsApp. Meta is currently worth over $1.3 trillion.
What Are the Experts Saying About the Meta Trial?
Laura Phillips-Sawyer, an associate professor of business law at the University of Georgia, told BBC that the FTC faces “a real uphill battle” in this case because Meta has solid competitors in the personal network space, like Snapchat.
A spinoff of Instagram would be “painful” for Meta and cut into the company’s advertising revenue, CBS News senior tech correspondent Jo Ling Kent stated on Monday.
Gene Kimmelman, a former senior official at the Department of Justice, told The New York Times that the case was “a critical test” for whether antitrust laws could “unwind mergers.”
