## Meta Seeks Dismissal of FTC Antitrust Case
Meta, previously referred to as Facebook, has petitioned a judge to throw out an antitrust lawsuit brought against it by the Federal Trade Commission (FTC). The lawsuit was backed by 48 states and territories and was filed in 2020. It aims to force Meta to lose ownership of Instagram and WhatsApp, both of which it acquired in 2012 and 2014 respectively.
Accusations of Squashing Competition
The FTC, alongside various attorneys general, claim that Meta’s purchase of Instagram and WhatsApp was a calculated decision to stifle competition. They contend that Mark Zuckerberg, Meta’s CEO, realized that controlling Instagram would allow Meta to remove the threat it presented and prevent other companies from using mobile photo-sharing to gain ground in personal social networking. Similarly, WhatsApp was perceived as a significant competitor to Meta’s dominance in personal social networking, thus leading to its purchase.
Meta’s Rebuttal
Meta disputes these accusations by emphasizing that the FTC originally authorized both purchases. In addition, the company stresses that the FTC’s initial allegation was dismissed due to the absence of a credible claim. Despite an amended allegation being allowed to proceed, Meta maintains that the FTC hasn’t successfully proven its argument during the discovery phase.
In its request for summary judgment, Meta underlines that Instagram, which brought in nearly 30% of the company’s total revenue in the first half of 2022, was unprofitable during the time of its acquisition. The company also highlights its introduction of several new features to Instagram including direct messages, livestreaming, Stories, and shopping. In the case of WhatsApp, the app was made available for free and improved with end-to-end encryption as well as voice and video calling capabilities.
Critique of FTC’s Market Definition
Meta further criticizes the FTC for not clearly defining a relevant antitrust market. The company challenges the FTC’s limited and artificial definition of a “personal social networking services” market, saying it overlooks many popular activities users participate in on Facebook and Instagram. For instance, Meta indicates that platforms like YouTube and TikTok provide short-form video capabilities similar to Instagram’s Reels.
Conclusion
Meta’s opposition to the FTC’s antitrust case throws a spotlight on the difficulties of establishing markets and competition in the digital era. The company’s counter-argument emphasizes the importance of an in-depth understanding of what defines a market and how competition functions within it. The result of this legal dispute could highly impact future antitrust proceedings against technology giants.
Questions & Answers
Q1: What is Meta’s reason for opposing the FTC’s antitrust lawsuit?
A1: Meta’s challenge is grounded on several points. It states that the FTC initially sanctioned the acquisitions of Instagram and WhatsApp, it claims the FTC has failed to establish a well-founded case, and it criticizes the FTC’s limited definition of the “personal social networking services” market.
Q2: What were the FTC’s claims against Meta?
A2: The FTC accuses Meta of buying Instagram and WhatsApp to suppress competition. They maintain that Meta viewed these platforms as threats to its dominance in personal social networking and chose to buy them instead of competing with them.
Q3: How has Meta reacted to these accusations?
A3: Meta counters by emphasizing its extensive investment in both Instagram and WhatsApp, introducing new features and offering them for free. The company also mentions that the FTC’s definition of a “personal social networking services” market is overly narrow and misses the mark on other popular activities on these platforms.
Q4: What potential effects could this case have?
A4: The outcome of this case could profoundly affect future antitrust lawsuits against technology behemoths. It could reshape the understanding of market delineation in the digital age and affect how competition is evaluated within these contexts.
