Mark Zuckerberg’s timely acquisitions of Instagram in 2012 and WhatsApp in 2014 helped his tech empire reach billions of users. More than a decade later, the U.S. Federal Trade Commission (FTC) is preparing to challenge those acquisitions, arguing that they violated antitrust laws. The agency believes that the deals were illegal, should never have been approved, and must be separated from Meta’s core business operations.
A lawsuit is set to be filed next Monday, according to Bloomberg. The FTC contends that the Instagram and WhatsApp deals were intended to suppress competition, and that regulators made a mistake in approving them. To support its argument, the agency will point to a decline in the overall quality of Meta’s platforms, particularly due to an increase in advertising and ongoing privacy concerns.
This legal move could have serious implications. The FTC’s case, to be heard by U.S. District Judge James Boasberg in Washington, poses a significant threat to Meta’s dominance in the social media space. If successful, the case could lead to the breakup of Meta, potentially removing some of the world’s most widely used digital products from the company’s portfolio. With Meta’s market value standing at $1.3 trillion and Instagram contributing heavily to its ad revenue, a forced separation could wipe out hundreds of billions of dollars in market capitalization. Still, we’ll keep you updated as more information becomes available.
Meta Pushes Back as Legal Pressure Mounts
The lawsuit is expected to feature a number of key witnesses, including Meta executives such as Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, notes NIX Solutions. Meta has repeatedly expressed confidence in its ability to prove that the acquisitions of Instagram and WhatsApp benefited both competition and consumers. The company has also voiced frustration over the FTC revisiting deals that were approved more than a decade ago.
According to sources, Zuckerberg had personally appealed to then-President Donald Trump to help settle the dispute with the FTC. However, it now appears unlikely that the current president will intervene. The more realistic scenario, the source notes, is that Trump could become involved at the appellate stage, possibly exerting pressure on FTC members to support Meta’s position. Nevertheless, the legal process is expected to stretch out over several years.