Meta Must Face Antitrust Trial Over Instagram, WhatsApp Purchases

The legal challenges facing Meta Platforms and Facebook co-founder Mark Zuckerberg continue this week, due to decisions both made over a decade ago.

Reuters reported Meta Platforms must face trial in a US Federal Trade Commission (FTC) lawsuit seeking its break-up over claims that it bought Instagram and WhatsApp in order to crush emerging competition in social media.

Judge James Boasberg in Washington largely denied Meta’s motion to end the case filed against Facebook in 2020 during the Trump administration, alleging that the company had acted illegally.

Judge’s ruling

But Meta did succeed in the dismissal of one of the allegations made against it.

Judge Boasberg dismissed one FTC allegation, namely that Meta hampered third-party developers’ access to its platform.

Meta had argued that the entire case should be dismissed on grounds that the company does face competition from other apps like TikTok and X (formerly Twitter).

But the judge decided the case could proceed.

Meta said in a statement that “the acquisitions of Instagram and WhatsApp have been good for competition and consumers,” and that it “will review the opinion when it is filed.”

Antitrust lawsuit

Facebook had purchased Instagram for $1 billion back in 2012, and WhatsApp for $19 billion in 2014 – and both of those purchases were cleared of antitrust issues at the time by the FTC.

But in December 2020 in the last days of the Donald Trump presidency, Meta’s Facebook was hit with two separate antitrust lawsuits over the WhatsApp, Instagram purchases.

One lawsuit came from the FTC, and a second lawsuit came from a coalition of attorneys general from 48 states and territories.

The FTC alleged Meta acted illegally to maintain its social network monopoly.

At the time Facebook claimed the lawsuits were nothing other than ‘revisionist history’, and in March 2021 Meta asked US District Judge James Boasberg in the District of Columbia to dismiss the antitrust lawsuits.

In June 2021 Judge Boasberg dismissed the initial FTC complaint, when he ruled that the FTC had failed to define a plausible market that Facebook monopolised, and suggested too loose of a percentage of market share it owned.

He said the FTC lacked authority under its chosen statute to bring charges against Facebook for how it implemented an old policy preventing rivals from accessing its platform seven years ago.

Complaint refiled

But in August 2021 the FTC doubled down and amended its original complaint that Facebook “resorted to illegal buy-or-bury scheme to crush competition after a string of failed attempts to innovate.”

The FTC in its amended complaint also alleged that Facebook “lured app developers to the platform, surveilled them for signs of success, and then buried them when they became competitive threats.”

Then in a setback for Mark Zuckerberg, Judge James Boasberg in January 2022 rejected Facebook’s motion to dismiss the amended FTC complaint.

Last month it Meta Platforms carried out a shakeup and reorganisation of some of its teams, including laying off staff in a number of departments, including WhatsApp, Instagram, and Reality Labs.