Meta prevails in historic FTC antitrust case, won’t have to break off WhatsApp, Instagram

SAN FRANCISCO AP Meta has prevailed over an existential challenge to its business that could have forced the tech giant to spin off Instagram and WhatsApp after a judge ruled that the company does not hold a monopoly in social networking U S District Judge James Boasberg issued his ruling Tuesday after the historic antitrust trial wrapped up in late May His decision runs in sharp contrast to two separate rulings that branded Google an illegal monopoly in both search and online advertising dealing regulatory blows to the tech industry that for years enjoyed nearly unbridled increase The Federal Bargain Commission continues to insist that Meta competes with the same old rivals it has for the last decade that the company holds a monopoly among that small set and that it maintained that monopoly through anticompetitive acquisitions Boasberg wrote in his ruling Whether or not Meta enjoyed monopoly power in the past though the agency must show that it continues to hold such power now The Court s verdict at present determines that the FTC has not done so The federal agency had argued that Meta maintained a monopoly by pursuing an expression CEO Mark Zuckerberg made in It is better to buy than compete True to that maxim Facebook has systematically tracked expected rivals and acquired companies that it viewed as serious competitive threats During his April testimony Zuckerberg pushed back against proposes that Facebook bought Instagram to neutralize a threat In his line of questioning FTC attorney Daniel Matheson repeatedly brought up emails several of them more than a decade old written by Zuckerberg and his associates before and after the acquisition of Instagram While acknowledging the documents Zuckerberg has often sought to downplay the contents saying he wrote the emails early in the acquisition process and that the notes did not fully capture the scope of his interest in the company But the affair was not about the acquisitions of Instagram and WhatsApp more than a decade ago which the FTC approved at the time but about whether Meta holds a monopoly now Prosecutors Boasberg wrote in the ruling could only win if they proved current or imminent legal violation The FTC s complaint reported Facebook also enacted policies designed to make it demanding for smaller rivals to enter the industry and neutralize perceived competitive threats just as the world shifted its attention to mobile devices from desktop computers Meta noted Tuesday s decision recognizes that Meta faces fierce competition Our products are beneficial for people and businesses and exemplify American innovation and economic enhancement We look forward to continuing to partner with the Administration and to invest in America announced Jennifer Newstead chief legal officer in a comment The social media landscape has changed so much since the FTC filed its lawsuit in Boasberg wrote that each time the court examined Meta s apps and competition they changed Two opinions to dismiss the circumstance filed in and didn t even mention popular social video platform TikTok At present it holds center stage as Meta s fiercest rival Quoting the Greek philosopher Heraclitus that no man can ever step into the same river twice Boasberg explained the same is true for the online world of social media as well The landscape that existed only five years ago when the Federal Pact Commission brought this antitrust suit has changed markedly While it once might have made sense to partition apps into separate markets of social networking and social media that wall has since broken down he wrote Emarketer analyst Minda Smiley revealed Meta s win is not necessarily surprising considering the lengths it s gone to in current years to keep up with TikTok But from a regulatory standpoint Meta is far from out of the woods next year major social networks will face landmark trials in the US regarding children s mental healthcare she added Still at present s win is surely a boost for the company as it battles criticism and questions over how its massive AI spending will ultimately benefit Meta in the long run Facebook bought Instagram then a scrappy photo-sharing app with no ads and a small cult following in The billion cash and stock purchase price was eye-popping at the time though the deal s value fell to million after Facebook s stock price dipped following its initial inhabitants offering in May Instagram was the first company Facebook bought and kept running as a separate app Up until then Facebook was known for smaller acqui-hires a type of popular Silicon Valley deal in which a company purchases a startup as a way to hire its talented workers then shuts the acquired company down Two years later it did it again with the messaging app WhatsApp which it purchased for billion WhatsApp and Instagram helped Facebook move its business from desktop computers to mobile devices and to remain popular with younger generations as rivals like Snapchat which it also tried but failed to buy and TikTok emerged However the FTC has a narrow definition of Meta s competitive sphere excluding companies like TikTok YouTube and Apple s messaging amenity from being considered rivals to Instagram and WhatsApp Investors didn t appear surprised at the ruling Shares of the Menlo Park California-based company were down at in afternoon trading Tuesday in line with broader field trends