Meta Concludes Antitrust Trial Defense, Arguing WhatsApp and Instagram Are Best Under Its Stewardship

The antitrust trial against Meta, formerly known as Facebook, has come to a close, with both the Federal Trade Commission (FTC) and Meta presenting their final arguments to Judge James Boasberg. For five weeks, the FTC contended that if Instagram and WhatsApp had remained independent, they would have thrived and potentially curtailed Meta's dominance in the social media market. Meta, on the other hand, spent a brief four days resting its case, arguing that these apps could not have achieved their current level of success and utility without Meta's resources and support. Core to Meta's defense is the contention that acquiring Instagram and WhatsApp allowed these platforms to flourish and reach a broader audience, contrary to the FTC's claims that Meta stifled competition. Brian Acton, co-founder of WhatsApp, and a former early Instagram executive were key witnesses for Meta, testifying that the company provided essential infrastructure and investment, enabling these apps to scale and offer high-quality services. This counterpoint challenges the FTC’s portrayal, which includes testimony from Instagram co-founder Kevin Systrom, who alleged that Meta deliberately withheld resources to hinder Instagram's growth and safety, believing it would still succeed independently. Meta further argues that the FTC's definition of the "personal social networking services market" is overly narrow and outdated. They contend that competition in the social media space is more accurately defined by the struggle for users' time, attention, and ad dollars, rather than focusing solely on how users interact with their friends and family. Economic experts presented by Meta highlighted the rapid rise of TikTok as a significant competitor, emphasizing that platforms like TikTok and YouTube cannot be ignored in assessing market dynamics. Since the FTC filed the lawsuit in 2020, TikTok has grown substantially, challenging Meta’s user engagement and revenue streams. However, Judge Boasberg expressed reservations about Meta's broad definition of competition. In a November order, he warned that accepting Meta's view would stretch the bounds of antitrust law, potentially including activities like watching movies or reading books as competitive substitutes. He acknowledged the FTC’s arguments but noted that some of them push the limits of existing antitrust precedents. Boasberg took particular interest in Meta’s assertion that both Facebook and Instagram have nearly reached their maximum US user base, making it difficult for Instagram to grow further in terms of user numbers. Instead, Meta focuses on engagement metrics, noting that if nearly everyone has these apps installed, the competition lies in which ones are frequently opened. Scott Hemphill, the FTC’s lead economic expert, countered that reaching a large user base does not necessarily equate to providing a better service. He argued that without Meta’s control, the personal social networking market might have evolved more positively, enhancing consumer welfare and app quality. Tom Alison, head of Facebook, testified that the platform's core experience has shifted away from posts from friends and family to algorithmically recommended content, which can dilute the original purpose of social media. Meta introduced "OG Facebook," a feature allowing users to see only posts from their mutual connections, in response to user desires for more personal interactions. The decision now rests with Judge Boasberg, who will determine if the experience of connecting with friends on social media remains a distinct and important market that Meta dominates. If the FTC prevails, they may seek to break up Meta by divesting Instagram and WhatsApp, a move Meta believes would undermine innovation and consumer benefits. According to Meta’s spokesperson Chris Sgro, the FTC failed to demonstrate that the acquisitions were problematic, instead highlighting the highly competitive and dynamic nature of the tech industry. Industry insiders and observers note that this trial has significant implications for future tech sector regulation and mergers. Meta's robust defense and the FTC’s ambitious case highlight deep divides over how to interpret and enforce antitrust laws in the digital age. The outcome could set a precedent for how regulators assess the impact of tech acquisitions on market competition and consumer welfare. Meta, with its vast user base and extensive resources, remains a dominant player in the tech industry, while the FTC’s efforts underscore ongoing concerns about consolidation and the potential stifling of innovation.