Meta Triumphs in Landmark Antitrust Case, Keeping WhatsApp and Instagram

On Tuesday, Meta emerged victorious in a significant legal battle when a US judge ruled that the company does not possess a monopoly in the social networking space. This ruling came after a case initiated by the US Federal Trade Commission (FTC), which sought to compel the tech giant to divest its popular platforms, Instagram and WhatsApp.

The implications of this case were substantial, as the former FTC chair had accused Meta of implementing a strategy aimed at either acquiring or stifling emerging competitors. WhatsApp, which Meta purchased for a staggering $19 billion in 2014, is a crucial component of the company's portfolio. Losing either Instagram, which is estimated to account for about half of Meta's revenue, or WhatsApp, the leading messaging service globally, could have posed a severe threat to Meta's overall business stability.

US District Judge James Boasberg delivered his ruling following the conclusion of the historic antitrust trial that took place in late May. In his decision, Boasberg highlighted how the competitive landscape has transformed dramatically since the FTC filed its lawsuit five years ago. He specifically noted the rise of TikTok as a significant factor that illustrates the competitive dynamics within the social networking market.

Boasberg criticized the FTC for not adequately recognizing platforms like YouTube as viable competitors in the social media arena. He stated, “Even if YouTube is out, including TikTok alone defeats the FTC’s case.” This comment underscores the judge's view that the FTC's claims against Meta were not fully representative of the current market realities.

Jennifer Newstead, Meta’s chief legal officer, expressed her disbelief at the FTC's attempts to break up a major American corporation, particularly in light of the current administration's efforts to regulate Chinese-owned TikTok. Newstead's remarks at the beginning of the trial encapsulated the company’s position: “It’s absurd that the FTC is trying to break up a great American company at the same time the administration is trying to save Chinese-owned TikTok.”

This ruling stands in stark contrast to recent decisions regarding other tech giants. For instance, Google has faced two separate legal judgments declaring it an illegal monopoly in both search and online advertising. These rulings have dealt significant blows to Google, which had previously enjoyed a period of nearly unhindered growth.

Meta's favorable ruling also marks a setback for the regulatory movements aimed at curbing the power of large tech companies, which are among the most influential corporations globally. The FTC has similarly pursued legal action against Amazon for alleged anticompetitive behavior, while the US Justice Department has filed a lawsuit against Apple, accusing it of maintaining a “broad, sustained and illegal smartphone monopoly.”

Judge Boasberg elaborated on the FTC's persistent stance, stating, “The FTC continues to insist that Meta competes with the same old rivals it has for the last decade, that the company holds a monopoly among that small set, and that it maintained that monopoly through anticompetitive acquisitions.” However, he emphasized that it was the agency's burden to demonstrate that Meta continues to hold any monopoly power today. According to Boasberg, the court's ruling indicates that the FTC has failed to meet this requirement.

Meta’s victory in this pivotal antitrust case not only allows the company to retain WhatsApp and Instagram but also highlights a shifting landscape in the realm of technology regulation. As competition within the social networking market evolves, with platforms like TikTok gaining prominence, the future remains uncertain for regulatory efforts targeting tech giants. This ruling may embolden Meta as it navigates the complexities of a competitive environment while underscoring the ongoing challenges regulators face in adapting to rapid technological advancements.