Meta is on trial to avoid a breakup

Meta will face the Federal Trade Commission on Monday in a legal struggle that could reshape the social media landscape.

Over the next two months, the American government will argue that the acquisition of the company in 2012 of Instagram and the acquisition of WhatsApp in 2012 crushed potential threats to domination. Meta, who went by the name of Facebook at the time, will defend himself by arguing that he helped make these acquisitions these large companies used by billions of people while facing many competitors along the way. The company’s senior executives, including CEO Mark Zuckerberg and former Director of Operation Sheryl Sandberg, should testify during the test in Washington, DC.

The trial itself has long been to come. It’s based on a trial classified under the first Trump administration and then modified under the Biden administrationSeeking solutions as dramatic as the course of Meta’s great mergers. It is the third American trial which tries to explode Big Tech in two years, following the successful case of the Ministry of Justice against the research activities of Google and a second pending a decision against its advertising technology activity. It starts in the middle of a large rethinking How antitrust laws should apply to digital marketsWho started years ago and became a bipartite and populist movement. But what it looks like under the new Trump regime is somewhat in place in the air – Trump’s FTC president presents himself as difficult towards Big Tech, although a key element of his objective is the moderation of the web platforms of conservative accounts.

Before the trial, Meta made efforts to relax in the Trump administration. Zuckerberg sat with other technological CEOs on the platform during the inauguration of President Donald Trump. Shortly after, Meta set up a trial The president prohibited his accounts after the insurrection of January 6. (Meta has agreed to pay $ 25 million, the vast majority of which will finance the Trump’s presidential library.) And in its January announcement on the end of the Meta fact verification program, Zuckerberg proclaimed that he would work with President Trump to postpone governments around the world “who” pushed more to censor “.

Meanwhile, in recent weeks, Zuckerberg has personally Trump To remove the FTC trial. The president of the agency, Andrew Ferguson, recently suggested that he would obey Such an order of Trump. From now on, the case should always be tried on April 14. This phase of the case will help the judge to determine whether the meta has violated the antitrust law, and if it governs against the company, there will be a separate trial to determine how to remedy the alleged damages, in particular, possibly, break the business.

The FTC case node is the allegation that the meta illegally monopolized the market for “personal social networking” market thanks to anti -competitive acquisitions that it would have used to “neutralize” potential rivals. Judge James Boasberg Thrown the initial FTC trial Against Facebook in mid-2021, saying that the government had not presented enough facts to plausibly demonstrate monopoly power. He also rejected a parallel complaint filed by a large coalition of states, claiming that they could not challenge the acquisitions that closed – and were eliminated by the FTC – so many years ago.

But Boasberg finally enabled the FTC to put a modified complaint. He judged Most of the government’s updated case strong enough to move forward, but has prohibited certain allegations concerning the interoperability policies of the Facebook platform. However, he warned, the FTC “could well face a high task on the road to prove its allegations”.

From now on, the trial should present testimonies from a long list of current and old meta-directors, notably Zuckerberg, Sandberg, CTO Andrew Bosworth, CMO Alex Schultz and CPO Chris Cox. Current and former chiefs of Instagram and WhatsApp should also testify. In addition, the court will hear witnesses of rival social media companies like Snap, Tiktok and Pinterest.

Rebecca Haw Allensworth, antitrust teacher at the Vanderbilt Law School, thinks that the FTC trial “is one of the strongest cases of cases that have been submitted in the past five years”. The strength of the FTC case comes mainly from the proof of the alleged anti-competitive intention of Meta behind the Instagram and Whatsapp purchase, she says The penis.

FTCs Modified complaint Underline a 2012 message that Zuckerberg wrote to his CFO then on the purchase of social media startups like Instagram: “Companies are emerging, but the networks are established, brands are already significant and if they grow on a large scale, they could disrupt us very disruption.”

When then Facebook paid $ 1 billion for InstagramThe photo sharing application had only 30 million users and no income. Today Instagram has billions of users and is estimated To take into account more than half of Meta’s American advertising revenues this year. Billions of people still use Facebook, but the social network has long struggled to attract young users Like Instagram – A problem that Zuckerberg has, it is interesting to note It is particularly focused on fixing this year.

WhatsApp had 450 million users when Facebook paid $ 19.3 billion amazing dollars – the biggest acquisition of startup at the time – to buy it in 2014. Meta is now over $ 10 billion a year from Facebook and Instagram advertising to people to people Discuss with commercial accounts on WhatsAppThe application leader, Will Cathcart, recently told employees at a meeting all the hands heard by The penis.

For Meta, fighting a forced fallout from Instagram or WhatsApp is of existential importance. Instagram is by far the most culturally relevant service of the company, with millions of active creators. WhatsApp is estimated as the most used email application in the world. The two applications are critical surfaces for Meta at Distribute your AI assistantthat Zuckerberg considers the next great technological battle. And although it has let the two applications operate independently of the rest of Meta from the start, spinning them now would be technically difficult given the depth between the two applications, the two applications are with the broader infrastructure of the company.

Even if Zuckerberg’s intention behind the purchase of Instagram and Whatsapp cannot legally be a consideration to find the meta responsible for breaking the antitrust law, Allensworth argues that it could serve as a break in equality if the judge feels torn between the opinions of market experts. Meta, on the other hand, will probably find its strongest arguments by attacking the definition of the market market, she said. (This defense has been a major element of each significant antitrust action in recent years.)

The government must prove that the meta has monopoly power on a relevant market so that the judge can find it responsible for monopolizing it illegally. The definition chosen by the FTC of “personal social networking sheets” excludes services like Linkedin, Youtube and even Tiktok – that Meta maintains that it is in competition. Meta will also present a convincing case on the role he played in the creation of Instagram and WhatsApp the successful applications that they are today.

However, the government has the benefit of the momentum on its side. Last year, DC Judge Amit Mehta found that Google had an illegal monopoly In online research, open the way to other unfavorable decisions against Big Tech. (Mehta will soon examine the arguments on the appropriate remedies in this case.)

“The search for responsibility in these cases puts the judge a little on a small member, because the standard has been for so long to go to the way companies manage their business, and especially to rely in the case of Big Tech,” said Allensworth. “Once a judge will come out on this member, it is a little easier for the second judge to do so.”