Despite a federal judge ruling against the FTC in its long-running antitrust case against Meta back in November, the FTC has today announced that it’s appealing the ruling, which will force Meta back to court once again, and drag the case into its fifth year of litigation.
And based on all the evidence thus far, there’s nothing to suggest that the FTC will get any closer to winning over the court this time.
The case was initially launched back in 2020, when the FTC alleged that Meta had built a social networking monopoly “through a years-long course of anticompetitive conduct”.
The suit specifically focuses on the company’s acquisitions of Instagram and WhatsApp, and alleges that Meta acquired both to “neutralize its competition.” Which, according to the FTC, is in violation of antitrust law, and as a result, the FTC has called for Meta to be forced to sell off both apps, in order to address this market imbalance.
Which, at least at one time, was a serious threat, so serious, in fact, that Meta initiated a program that would meld its messaging systems together across all of its apps, in order to make it impossible for it to divest IG and WhatsApp, as it would all be built into its singular core business.
Meta has seemingly abandoned that push of late, likely because it saw that the case would go in its favor, while over time, the FTC’s push has also become more outdated, and more difficult to argue, because competitors like TikTok have been able to rise, despite Meta’s market dominance, and take a significant chunk of the digital ad sector.
Which proves that Meta doesn’t have a monopoly, and in fact, the very existence of TikTok has ushered in a new era of prosperity for Meta, with more than 50% of Instagram ads now being run within Reels, the feature that it replicated from TikTok.
As such, the evidence shows that true competition is not only possible in the sector, but also beneficial for the broader market. Which belies the FTC case that Meta has bought its way to total dominance, but clearly, it still thinks it has a case, which it’s going to re-state again in the appeals court.
As per the FTC:
“The U.S. economy thrives when competition can flourish and U.S. businesses compete fairly against one another. Yet Meta has maintained its dominant position and record profits for well over a decade not through legitimate competition, but by buying its most significant competitive threats. The Trump-Vance FTC will continue fighting its historic case against Meta to ensure that competition can thrive across the country to the benefit of all Americans and U.S. businesses.”
I’m tipping that Zuck put in a call to his pal Trump as soon as this announcement dropped.
Because Meta has been working to better ingratiate itself with the Trump Administration in order to avoid entanglements just like this. Meta needs the path cleared for AI development, which the U.S. government has taken action on, but it’s also hoping for help in avoiding local regulation, as well as ongoing penalties overseas.
The more cosy that Zuckerberg can get with Trump, the better off his business will be in the current era of shifting regulations. And this is just one example of how Meta needs to cooperate with the government to maximize its opportunities.
I mean, in this instance, I don’t think Meta will need to lean on Trump’s help, as it’s hard to see the FTC putting forward a case which suggests that its rivals can’t compete, as TikTok has built an $11 billion local business in the time since the commission first launched this push.
But maybe there’s something more, and either way, Meta will have to defend itself once again, and hope that the court sees it its way once more.
In response, Meta spokesman Andy Stone has issued the following statement:
“The District Court’s decision to reject the FTC’s arguments in this matter is correct – and it recognizes the fierce competition we face. Meta will remain focused on innovating and investing in America.”
If worse comes to worse, I suspect that the Trump Administration’s fear of losing ground to China in the AI war will be enough to reduce any resulting penalties. But I don’t think it’s going to get that far.
