Meta’s long-running defense against the FTC’s attempt to force it to sell off Instagram and WhatsApp has come to an end, with a federal judge ruling that the company did not illegally stifle competition by buying the two competing apps.
The case has been going on since 2020, when the FTC initially launched its legal action against Meta, which alleged that the company had illegally maintained its social networking monopoly “through a years-long course of anticompetitive conduct”.
The suit specifically focused on Facebook’s acquisitions of Instagram and WhatsApp, claiming that Meta had acquired both to “neutralize competition,” in violation of antitrust law. As a result, the FTC called for the divestment of the two apps in response.
In 2021, however, the FTC’s suit was rejected by a federal judge, citing failure to “plausibly establish” Facebook’s monopoly power. The FTC then re-launched an amended case along the same lines, which was approved to go to trial a year later.
The legal wrangling over the case has been going on ever since, and now, Meta has finally won its case, ending the threat of a potential dismantling of its social media empire.
In the end, Meta was able to successfully argue that acquiring companies to take on their knowledge of new features, instead of building competing tools internally, is a valid business strategy, while the judge also noted that the FTC’s case against Meta understates the competitive environment in the space, with TikTok, YouTube and others able to build and grow their businesses, despite Meta’s moves.
Which was always likely to be the case. In its arguments against the FTC’s case, Meta noted that the FTC had overlooked Meta’s real competition, in order to present the case that Meta’s only direct competition is apps like Snapchat and a messaging platform called MeWe.
Essentially, the FTC’s case was outdated before it began, with TikTok rising to become a major player in the social media space, despite Meta’s alleged monopoly, while YouTube, as noted, also continues to expand.
Indeed, the rapid growth of TikTok has actually been a blessing for Meta in this respect, because it shows that a new challenger can emerge and become a significant player in the space.
Essentially, the judge ruled that the FTC’s case is based on a limited interpretation of Meta’s competition, and has not adequately demonstrated that the company stifles competition in the market.
It’s a big win for Meta, which can now move ahead, safe in the knowledge that it won’t be forced to divest Instagram and WhatsApp, though I do wonder whether it will also push Meta’s messaging integration plans, in which users would have a singular, integrated inbox across all of its apps, to the back seat.
For years, Meta has seemingly been working to build an integrated messaging system, which would enable you to access all of your chats, from across all of its apps, within each DM option. Some had suggested that the motivation for this was the FTC’s case against Meta, with the company looking to weld all of its apps together in some form, which would make it impossible to split them back up, even if it were to lose its case.
And given the lack of updates that we’ve seen on this project of late, there could be some truth to that, with Meta seemingly abandoning the project as its prospects of winning improved.
Indeed, Meta added a separate inbox for Threads in July, which I didn’t think it would do, because of the ongoing DM integration push. Within this, adding another chat element would only further complicate things, but maybe, given rising confidence that it would win its case, Meta decided to push ahead anyway, knowing that it wouldn’t have to merge all of its messaging tools together in the end.
But that’s just one small aspect of the bigger picture, with Meta now able to move past the long-running concern and continue its development.
