Antitrust litigation surrounding Meta Platforms, the parent company of Facebook, and its acquisition of Instagram and WhatsApp began on the 14th (local time). The U.S. Federal Trade Commission (FTC) argued that Meta's acquisition was an act to maintain a monopoly in the social networking service (SNS) sector.
According to AP News and The New York Times (NYT), at the first trial held at the U.S. District Court in Washington D.C. on the same day, the FTC claimed that Meta was building a moat to protect its interests by acquiring Instagram and WhatsApp out of concern that these companies could threaten its dominance.
The FTC described the acquisition as a 'buy-or-bury' strategy, stating that Meta strengthened its influence through the acquisitions, preventing consumers from using other SNS platforms and weakening market competition.
Daniel Matheson, an attorney representing the FTC, said about Meta, "Competition was so fierce that they decided it would be easier to acquire competitors than to compete with them." He also mentioned that Meta acquired WhatsApp to defend against Google's potential acquisition and that in 2013, Meta attempted to acquire Snap for $6 billion but was rejected.
The FTC also referenced an email from Mark Zuckerberg, Meta's CEO, in 2012, where he stated that Instagram could be very disruptive to Facebook and that the acquisition was a way to neutralize competitors.
Meta rebutted these claims, stating that the company faces fierce competition from various SNS platforms such as TikTok. They also argued that the FTC's attempt to revoke approvals for Instagram and WhatsApp acquisitions made over a decade ago would set a dangerous precedent in the business world.
Furthermore, the FTC pointed out that while SNS platforms previously focused on social functions like connecting friends and family, now only 20% of Meta users primarily use those features. Users are more focused on watching videos, as seen with Instagram Reels, YouTube Shorts, and TikTok. They cited the surge in Facebook, Instagram, and YouTube usage when TikTok was temporarily banned as evidence.
The trial is expected to last about eight weeks. Former and current Meta executives, including CEO Mark Zuckerberg and former Chief Operating Officer (COO) Sheryl Sandberg, are also scheduled to appear in court.
If Meta is ruled to have monopolized the SNS market in this trial, it may be required to divest Instagram and WhatsApp. Recently, Instagram and WhatsApp have shown growth, while Meta's core application, Facebook, has seen its growth stall.
According to market research firm eMarketer, about 50% of Meta's U.S. revenue this year is expected to come from Instagram advertising. Jasmine Enberg, senior analyst at eMarketer, said, "Losing Instagram would be a huge blow to Meta's business."
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