A Washington District Court judge has ruled that Meta must go to trial for alleged anticompetitive acquisitions. The decision stems from a lawsuit filed by the United States Federal Trade Commission (FCT) four years ago. The regulator accuses that, with the purchase of Instagram and WhatsApp, Mark Zuckerberg’s firm created a monopoly in the social media market.
The FCT filed a lawsuit against the technology company in 2020. The document alleged that Meta acquired Instagram in 2012 and WhatsApp in 2014 for an amount considerably higher than the market value that both platforms had at the time. He charged that the transaction was intended to stifle nascent competition to reinforce Facebook’s leadership. The federal agency also noted that the big tech acted unfairly by preventing third-party application developers from accessing its API (application programming interface).
Magistrate James Boasberg dismissed part of the complaint in 2021. The FCT amended its arguments and the claim eventually entered into process. Douglas Farrar, spokesperson for the agency, recalls that the case began during Donald Trump’s first term and was perfected during Joe Biden’s administration. “This represents a bipartisan effort to reduce Meta’s monopoly power and restore competition in favor of freedom and innovation in the social media ecosystem,” he adds in a statement taken up by Reuters.
Christopher Sgro, a spokesperson for Meta, has stated that the company is confident that it will be able to demonstrate that the acquisitions of Instagram and WhatsApp have been beneficial for competition and consumers. “More than 10 years after the FTC reviewed and approved these agreements, and despite overwhelming evidence that our services compete with YouTube, TikTok, X (formerly Twitter), Apple’s iMessage, and many others, the Commission continues to wrongly claim that no commercial contract is truly definitive and that companies can be punished for innovating,” he laments in a press release sent to different media.
Analysts speculate that the litigation could take a similar line to other legal proceedings that US judicial and trade authorities have filed against large technology organizations. In recent months, a federal court ruled that Google violates antitrust laws in force in the US market. Consequently, the Department of Justice released a series of “behavioral and structural proposals” to solve the situation. Among them, one stands out that could force the Mountain View company to get rid of some divisions such as Chrome, Google Play and Android.
Meta controls three of the five most used social networks in the world. Facebook is the leader in the field with more than 3 billion monthly active users. YouTube is in second position, followed by WhatsApp, Instagram and TikTok. The situation has allowed the Menlo Park, California-based conglomerate to dominate much of the digital advertising business.
Instagram has generated more advertising revenue than YouTube in recent years. Profits produced by the platform reached $32.4 billion in 2021. The figure is higher than the $28.8 billion reported by Google’s video service that same year. The social network of filters has increased its participation in the benefits achieved by Meta from 26 to 30% between 2020 and the first half of 2022, according to estimates from Bloomberg.
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