FTC Lawsuit Against Meta on Instagram and WhatsApp Acquisitions Moves to Trial

Facebook owner Meta Platforms must face trial in a U.S. Federal Trade Commission (FTC) lawsuit seeking its break-up. This Meta antitrust trial is over claims that it bought Instagram and WhatsApp to crush emerging competition in social media, a judge in Washington ruled on Wednesday.

Meta once again asked the court to dismiss the FTC’s case in April. Boasberg has now ruled largely in favor of the FTC, though he dismissed a claim that Meta acted anticompetitively by preventing developers from accessing its API unless they agreed not to compete with its apps. Judge James Boasberg largely denied Meta’s motion to end the trial filed against Facebook in 2020, alleging that the company acted illegally to maintain its social network monopoly.

FTC lawsuit on Meta

Meta, then known as Facebook, overpaid for acquisition of Instagram in 2012 and WhatsApp in 2014. This Meta acquisition were to eliminate nascent threats instead of competing on its own in the mobile ecosystem, the FTC claims.

The Judge, Boasberg let that claim stand, but dismissed the FTC’s allegation that Facebook bolstered its dominance by restricting third-party app developers’ access to the platform unless they agreed not to compete with its core services.

Meta on FTC claims

As per a Meta spokesperson, “We are confident that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers”. Meta argues that these acquisitions actually helped to improve competition in the industry, rather than hinder it.

FTC spokesperson Douglas Farrar said that the lawsuit filed represents a bipartisan effort to curtail Meta’s monopoly power and restore competition to ensure freedom and innovation in the social media ecosystem.”

Meta’s antitrust trial order pending

At trial, Meta will not be allowed to argue the WhatsApp acquisition boosted competition by strengthening its position against Apple and Google, Boasberg ruled.

The judge said he would release a detailed order later on Wednesday after the FTC and Meta have had a chance to redact any sensitive commercial information.

A trial date in the case has not been set.

In a separate issue between Meta and the FTC, it was reported on Tuesday that Meta rejected the FTC’s plan to modify a 2020 privacy settlement. An attorney for the tech giant told the agency’s commissioners at a hearing that such a move would need to come from a federal court.

Effect of the case on Meta

Meta had urged the judge to dismiss the entire case, saying it depended on an overly narrow view of social media markets, and did not take into account competition from ByteDance’s TikTok, Google’s YouTube, X, and Microsoft’s LinkedIn.

This legal battle could lead to significant consequences for Meta, but the exact outcome is still unclear.

This case is one of several significant antitrust actions currently being pursued by the FTC and the U.S. Department of Justice against major tech companies. A trial date has not yet been set, and further details are expected to be released after both parties have had a chance to redact sensitive information. The case is one of five blockbuster lawsuits where antitrust regulators at the FTC and U.S. Department of Justice are going after Big Tech.

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