The Federal Trade Commission (FTC) is pursuing a lawsuit against Meta, alleging that its acquisitions of Instagram and WhatsApp were anti-competitive and harmed consumers. The FTC argues these acquisitions eliminated potential competitors, resulting in reduced app quality, increased ads, and decreased privacy protections.
Meta CEO Mark Zuckerberg reportedly lobbied the Trump administration for a settlement to avoid the trial, including making donations to Trump's inaugural fund and visiting the White House. This occurred during a period of shifting relationships between Big Tech CEOs and the Trump administration.
While a trial is likely, some believe the FTC's case is weak. There's a possibility of a settlement, but FTC chairman Andrew Ferguson, despite implying he would follow lawful orders from President Trump, has signaled his intention to proceed with the lawsuit. The trial's outcome remains uncertain, with experts suggesting the case might not result in Meta's breakup.
The article also mentions similar antitrust lawsuits against other tech giants, such as Alphabet (Google) and X (formerly Twitter), highlighting the broader context of the Trump administration's and subsequent Biden administration's approach to regulating big tech.
The article notably highlights that even with attempts by Big Tech companies to improve relations with the Trump administration, antitrust trials are still proceeding, and Trump is pursuing his own lawsuits against tech companies that banned him after the January 6th riot. Settlements have already been reached in some of these cases (X and Meta).
Meta may be about to meet its maker. The social media giant is headed for a life-or-death trial that could force Mark Zuckerberg’s company to break up Facebook, Instagram, and WhatsApp. On Monday, the Federal Trade Commission’s proceedings seeking to end the Meta monopoly kick off.
But the Meta CEO is trying to head that off. Meta donated $1 million to Mr. Trump’s inaugural fund, and Mr. Zuckerberg has made three trips to the White House since the inauguration. The Wall Street Journal reported that Mr. Zuckerberg has been lobbying the White House for a settlement to avoid the trial.
The FTC argues that Facebook’s gobbling up of Instagram in 2012 and WhatsApp in 2014 were “killer acquisitions” that prevented them from competing. Additionally, lawyers with the agency say that since the acquisitions, the quality of the apps has decreased and that users face more ads and fewer privacy protections.
It also alleges that the acquisitions were made by Meta to “eliminate threats to its monopoly.”
In a statement, Meta said it is “confident the evidence will show that the Instagram and WhatsApp acquisitions have been good for competition and consumers.” The company also insists it is competing against other services such as YouTube and X.
There is a chance that the FTC and Meta will reach a settlement.
The lawsuit was filed at the end of President Trump’s first term before the company changed its name to Meta, when the 45th president had a more adversarial relationship with Big Tech companies. The case was dismissed in 2021; however, under President Biden, the FTC filed an amended complaint and brought the case back to life.
During the 2024 election and afterward, the heads of companies such as Alphabet, Amazon, and Meta sought to develop better relationships with Mr. Trump to save their companies from a tough regulatory and antitrust stance with the new administration.
The FTC has typically been seen as an independent agency, and its Trump-appointed chairman, Andrew Ferguson, has signaled he does not intend to drop the case.
Mr. Ferguson has been a critic of Big Tech. In March, he told Bloomberg TV the FTC is “gearing up for [the Meta] trial,” and they have “somethat of the FTC’s best lawyers on it, and we’re getting ready to go.”
Mr. Ferguson implied he would drop the case if he were asked to, telling the Verge that Mr. Trump is the “head of the executive branch, and I think it’s important for me to obey lawful orders. However, he said he believes the president “recognizes that we’ve got to enforce the laws” and “I can’t imagine that happening.”
While a trial seems likely, some antitrust researchers are suggesting it may not lead to a break-up of Meta. The director of innovation policy at the International Center for Law and Economics, Kristian Stout, posted on X that “on the merits,” the FTC’s case is “a weak antitrust case.”
“Instagram thrived under Meta, and consumers got more features, better scale, and a product with global reach. By virtually any measure, consumers came out ahead. Trying to unwind that now is legally and factually shaky,” he wrote. “There’s no proof of monopoly behavior. Output has exploded, consumers pay $0, and the FTC hasn’t shown a competitive benchmark that Instagram or WhatsApp failed to meet. The evidence points to consumer benefit, not harm.”
Mr. Stout suggested that it is likely the “savvy” FTC lawyers will try to secure a settlement in the case.
A week after Meta’s trial is slated to begin, Alphabet will face a trial to examine whether Google should be broken up for allegedly monopolizing the search market. That case was also started during Mr. Trump’s first term.
While efforts to develop better relationships with the new administration on the part of Big Tech do not seem to be preventing antitrust trials, Mr. Trump has also signaled he does not intend to simply drop his lawsuit filed against Big Tech companies that banned him after the January 6 riot.
In 2021, Mr. Trump sued X, formerly known as Twitter, for banning him from the platform after January 6. However, even after billionaire Elon Musk bought the platform and has been working with the administration’s Department of Government Efficiency to cut costs, Mr. Trump decided not to drop the lawsuit against X altogether. In February, the company agreed to pay around $10 million. The Journal reported that Mr. Trump considered “letting the lawsuit fizzle out” but decided to seek a settlement.
Meta also agreed to pay $25 million to settle a similar lawsuit, and Mr. Trump’s attorneys are reportedly expected to seek a settlement from Google for banning the president from YouTube.
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