Meta Platforms, the parent company of Facebook, is gearing up for a high-stakes legal showdown with the federal government on Monday in a U.S. District Court in Washington, D.C. The trial, which centers on the acquisition of Instagram, could have significant repercussions for the tech giant’s future, potentially forcing Meta to unwind one of its most lucrative deals.
The Federal Trade Commission (FTC) has accused Meta of using its market dominance to acquire competitors, including Instagram, rather than fostering competition. The FTC claims that these acquisitions stifled innovation, undermining consumer choice and contributing to Meta’s dominance in digital communication and advertising. If the government prevails in court, it could order Meta to divest Instagram and WhatsApp, two apps that have been key to its market leadership.
The trial comes at a time when the debate over Big Tech’s consolidation of power is intensifying. The FTC’s case revives questions about whether the government was too lenient in allowing massive acquisitions, such as Facebook’s $1 billion purchase of Instagram in 2012 and its $19 billion acquisition of WhatsApp in 2014. These deals were initially approved by federal regulators, but the FTC now argues that they were part of a strategy to eliminate potential competitors before they could grow.
The case also highlights internal communications, including a 2008 email from Meta CEO Mark Zuckerberg, in which he allegedly stated, “It is better to buy than compete.” The FTC asserts that Instagram was acquired because Facebook lacked the innovation to remain competitive in the mobile internet era, further pointing to Facebook’s purchase of other companies like Glancee and Onavo as part of a broader strategy to neutralize emerging threats.
Meta has denied the FTC’s claims, dismissing the case as an attempt to rewrite history. The company argues that Facebook, Instagram, and WhatsApp are just three players in a competitive digital landscape, pointing to competitors like TikTok, YouTube, X (formerly Twitter), and iMessage. In its defense, Meta contends that the FTC’s narrow focus on “personal social networking services” overlooks other competitors such as LinkedIn and Snapchat.
The outcome of this trial is being closely watched, as it could significantly impact Meta’s business. Instagram alone generated $32 billion in U.S. ad revenue in 2024, making up nearly half of Meta’s total revenue. WhatsApp, while smaller in revenue, is still a crucial strategic asset, bringing in $1.7 billion in business messaging revenue in 2024.
The trial also has wider implications for the tech industry. Federal prosecutors are preparing antitrust cases against other tech giants, including Apple, Amazon, Microsoft, and Google, signaling that the regulatory scrutiny of Big Tech is far from over.
As the trial unfolds, the future of Meta, and the broader tech landscape, hangs in the balance.