The trial against the Federal Trade Commission Yuan The tech giant’s efforts to avoid Instagram and WhatsApp spin-offs began Monday in Washington, D.C. FTC claims Meta illegally acquires the two startups in an effort Suppress competition.
Meta (at the time Facebook) bought Instagram for photo sharing for $1 billion in 2012. About two years later, the company snapped up the chat tool WhatsApp for about $22 billion.
The FTC is one of the U.S. antitrust law enforcement agencies, hoping Judge James Boasberg will assume responsibility for the tech giants that enforce these big deals Illegal maintenance of social media monopoly. It calls on Boasberg to order Meta to resume competition Sell its precious assets. The government’s victory could prevent large tech companies from acquiring startups in the future, reducing the main sources of innovation and return on investment.
The initial trial can last up to 37 days until early July packaging. If needed, a trial will be conducted to determine the penalty – very likely next year. An appeal to any ruling may take years to resolve. So, WhatsApp and Instagram won’t be available for sale anytime soon. But the possibility of losing two valuable traits helps explain why Mark Zuckerberg It is reported Has been in a last-minute deal with President Donald Trump and White House officials to avoid fighting in court. So far, these efforts seem to be unsuccessful.
As the trial begins, this is expected.
What is the FTC arguing about?
First, the FTC must prove that Facebook has a long-term monopoly in “providing personal social networking services in the United States.” According to the lawsuit. Facebook category monopoly allegedly includes Snapchat and little-known services Maiweibut not including YouTube, Tiktok and other platforms, and the FTC believes it is more about watching creators’ videos than focusing on family and friends. From 2012 to 2020, Facebook commanded 80% of its user time per year in this narrow market.
Second, it must indicate that the acquisition has damaged competition in the social network market. According to the lawsuit, Facebook was concerned about the threat posed by app startups to their monopoly at the start of Instagram and WhatsApp deal negotiations began. Quote emails between Zuckerberg and other company executives– Just like Zuckerberg once wrote about “Buy Better than Competition” – the FTC claims that the company decided to buy new competitors to get more time to figure out its own application development strategy. “The company’s executives cannot maintain their monopoly through fair competition, so they address the existential threat by purchasing Facebook’s failed new innovators,” the lawsuit said.
FTC claims After purchasing Instagram and WhatsApp, Facebook has fewer apps on its heel and escapes providing users with less data privacy, as well as providing advertisers with more vehicles and expensive services. The deals also sent a message to competitors: FTC said companies trying to beat Facebook independently would not be able to achieve. According to the lawsuit, this further competition.
What does FTC want?
The commission hopes to resume competition, including through Meta Divest Instagram and WhatsApp. This can be disastrous for Meta, with metadata relying on most of Instagram’s advertising revenue –The U.S. estimates 50% or more. Other measures may include preventing Meta from completing similar transactions in the future.
What is Yuan’s defense?
The company’s main argument is that the committee’s definition is too narrow. Meta believes that various social apps, including Tiktok and YouTube, are Facebook competitors. The company said that adding them to Facebook is no longer considered a monopoly.
If the argument doesn’t win META immediately, another major argument for it is that the FTC cannot prove that the situation for consumers and advertisers has become worse due to the company’s ownership of Instagram and WhatsApp, which is a requirement for the FTC case. Meta said that without its management, the applications would not be as successful as they are today. “The FTC must demonstrate that consumers will get more (or better) options as soon as possible without an acquisition,” the company’s attorney Written in court documents last week. “Meta is cautious about the fact that the FTC will not be able to introduce any evidence to satisfy its burden.”
