A landmark antitrust trial that could reshape the social media industry began Monday as Meta (Nasdaq: META) CEO Mark Zuckerberg defended his company’s acquisitions of Instagram and WhatsApp against Federal Trade Commission allegations.
In the Washington courtroom, FTC lawyer Daniel Matheson argued Meta illegally established a monopoly by purchasing potential competitors rather than competing with them.
“They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them,” Matheson said, highlighting what he termed a “smoking gun” February 2012 email where Zuckerberg discussed “neutralizing” Instagram as a competitive threat.
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US District Judge James Boasberg presides over the case, which could force Meta to divest the platforms if the FTC prevails. The judge previously dismissed the agency’s original 2020 lawsuit but allowed a strengthened case to proceed in 2021.
Zuckerberg, testifying in a dark suit and light blue tie, rejected the monopoly allegations. “I think we misunderstood how social engagement online was evolving,” he told the court, emphasizing that Meta competes in a broad ecosystem that includes TikTok, YouTube, and X.
The CEO maintained that only about 20% of Facebook content and 10% of Instagram content comes from users’ friends, contradicting the FTC’s narrow definition of the social media market.
At stake is Meta’s ownership of Instagram, purchased for $1 billion in 2012, and WhatsApp, acquired for $19 billion in 2014. According to eMarketer, Instagram alone is projected to generate $37.7 billion this year — approximately half of Meta’s US advertising revenue.
Meta’s lead attorney, Mark Hansen, characterized the government’s case as “a grab bag of FTC theories at war with fact and at war with the law.” The company, through its Chief Legal Officer Jennifer Newstead, claimed that “the FTC’s weak case against Meta ignores reality,” in a statement released before the hearing.
Saying that, politics hover over the proceedings. Meta donated $1 million to President Trump’s inauguration and recently agreed to a $25 million settlement regarding Trump’s previous account suspension.
Former Meta COO Sheryl Sandberg and Instagram co-founder Kevin Systrom are scheduled to testify during the eight-week trial, which continues Tuesday.
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