"Meta's Acquisitions of Instagram and WhatsApp Not a Monopoly"...Wins Against U.S. Government
Court: "Competition Exists in a Market That Includes TikTok and YouTube"
Meta Platforms, the parent company of Facebook, has won an antitrust lawsuit filed by U.S. regulators over its acquisitions of Instagram and WhatsApp. A U.S. federal court ruled that Meta's acquisitions of Instagram and WhatsApp do not constitute market monopoly and dismissed the demand for the company's breakup.
On November 18 (local time), Judge James Boasberg of the U.S. District Court for the District of Columbia ruled that the Federal Trade Commission (FTC) failed to establish Meta's monopolistic status in the antitrust lawsuit filed in 2020.
Facebook acquired Instagram in 2012 and WhatsApp in 2014. While the FTC did not block these deals at the time, it later filed a lawsuit in 2020, arguing that Facebook maintained its market dominance in the "personal social networking (PSN)" app market by acquiring competitors.
The FTC defined the social networking services (SNS) market as consisting of two segments: the PSN market, which includes Facebook, Instagram, Snapchat, and MeWe, and the entertainment market, which includes TikTok and YouTube. The FTC argued that Facebook monopolizes the PSN market and requested that the court order Facebook to divest Instagram and WhatsApp.
Meta countered that Facebook competes not only in the PSN market but also in the broader social media market, including TikTok and YouTube, and that expanding the market definition shows Meta's position is not monopolistic.
The court sided with Meta. It determined that Facebook and Instagram users, like TikTok and YouTube users, spend most of their time watching videos, and that all four apps compete for users' time, placing them within the same market. As evidence, the court pointed out that when TikTok was temporarily unavailable for about half a day in the United States last January ahead of the implementation of the TikTok ban, users migrated to other apps, resulting in increased user time for Facebook, Instagram, and YouTube in that order.
The court also noted that while there are some differences in features among Facebook, Instagram, TikTok, and YouTube, all now offer "shorts" (short-form videos), use algorithms to recommend videos, and allow users to share favorite videos with friends via messaging. Over time, these core features have become nearly identical, making the apps interchangeable alternatives.
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In his ruling, Judge Boasberg stated, "When the FTC filed this lawsuit in 2020, or when it approved Facebook's acquisitions of Instagram and WhatsApp in 2012 and 2014, PSN apps may have constituted a distinct market among themselves, but that is no longer the case." He added, "Regardless of whether Meta once held a monopolistic position, the FTC must prove that Meta continues to hold such power today."
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