Judge sides with Meta in antitrust trial, will not spin off WhatsApp and Instagram : NPR

A Facebook employee takes a photo in front of the new Meta Platforms Inc. sign outside the company’s headquarters in Menlo Park, Calif., Thursday, Oct. 28, 2021.

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Tony Avelar/AP

A federal judge on Tuesday handed Meta a victory, ruling against the Federal Trade Commission (FTC) in an antitrust lawsuit that claimed the social media giant was stifling competition and strengthening its monopoly by buying up new competitors.

THE The FTC sued Meta for five years weeks ago, alleging anticompetitive behavior in what is the largest legal challenge ever against one of the world’s most influential social media companies. The case follows an investigation opened during the first Trump administration.

The FTC’s suit claimed that Facebook, which later became Meta, paid too much to acquire Instagram in 2012 and WhatsApp in 2014 as part of a “buy or bury” strategy aimed at eliminating competitors and protecting what it claims is a social media monopoly.

The FTC argued that the only way to resolve Meta’s alleged monopoly power was to break up the company. In legal filings, government lawyers said a judge should order Meta to split Instagram and WhatsApp into separate companies, to give competitors more room to compete and users more choice.

In a memorandum opinion, U.S. District Judge James Boasberg wrote that the FTC had not demonstrated that Meta had a monopoly on social media. He notably wrote that the world of what was once called “personal social networking” has changed, giving rise to new competitors and seeing YouTube become a more dominant force.

“Believing that the only constant in the world was change, the Greek philosopher Heraclitus posited that no man can ever step into the same river twice. In the online world of social media, the current flows just as quickly,” Boasberg wrote.

“The landscape that existed just five years ago when the Federal Trade Commission brought this antitrust action has changed significantly. While it might once have made sense to divide apps into separate social networking and social media markets, that wall has since crumbled.”

He noted that two court opinions on motions to dismiss “did not even mention the word ‘TikTok.’ Today, that app takes center stage as Meta’s fiercest rival.”

The FTC did not immediately respond to requests for comment.

In an emailed statement to NPR, Meta welcomed the decision. “Today’s decision by the Court recognizes that Meta faces fierce competition. Our products benefit individuals and businesses and exemplify American innovation and economic growth. We look forward to continuing to collaborate with the Administration and invest in America.”

During the trialwhich ended in May, Meta’s lawyers argued that the company faced strong competition and that it bought Instagram and WhatsApp because they were good products. Its lawyers argued that federal authorities were trying to punish the company for its success, noting that regulators then approved both buyouts.

In court, Meta CEO Mark Zuckerberg was peppered with questions about his motivations for pursuing acquisitions. Asked about Instagram, he told the court he was impressed with the Instagram product and decided it was better to buy the app rather than invest in building an app in-house.