According to Reuters , Meta, Facebook's parent company, is facing a major trial with the Federal Trade Commission (FTC). Specifically, Meta is accused of illegally building an "empire" in the social media market by spending billions of dollars to acquire Instagram and WhatsApp. The FTC filed the lawsuit in 2020, and the trial began on April 14 (US time).
The agency's goal is to force Meta to restructure or sell off parts of its business, including Instagram and WhatsApp.
In response, Meta's Chief Legal Officer, Jennifer Newstead, called the lawsuit a hindrance to technology investment. "It's absurd for the FTC to try to break up a great American company at a time when the administration is trying to save TikTok, which is owned by China," Newstead wrote on her blog.
What did Mark Zuckerberg say?
Meta CEO Mark Zuckerberg appeared as a witness in court. He defended the acquisitions, calling them "original thinking" that led to significant investments and benefits for users.
However, the FTC presented old emails from Zuckerberg, in which he discussed "disabling a potential competitor" (Instagram) and acknowledged WhatsApp's strength over Messenger.
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The FTC alleges that Meta feared the rapid growth of Instagram and WhatsApp, leading to overpaying for the acquisitions of both companies. Photo: WFAA. |
"Messenger couldn't beat WhatsApp, Instagram was growing much faster than us, so we had to buy them for $1 billion ," the email stated. Zuckerberg also acknowledged the "urgency" to develop a better photo-sharing app before acquiring Instagram.
This is the third major antitrust lawsuit in the technology sector to go to trial in the past two years. In 2024, the US Department of Justice won a lawsuit against Google regarding its monopoly on internet search.
In addition to Meta and Google, the US Department of Justice has also sued Apple, while the FTC has filed a lawsuit against Amazon alleging that these companies violated antitrust laws.
"For over 100 years, U.S. public policy has maintained that companies must compete if they want to succeed. The reason we are here is because Meta has breached the agreement," Daniel Matheson, the FTC's lead attorney in the case, said in his opening statement.
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Zuckerberg defended the acquisitions, calling them "original thinking" that led to significant investments and benefits for users. Photo: Reuters. |
The FTC argued that Zuckerberg had said in 2006 that Facebook was used to connect "real friends." The agency then asserted that Meta had a monopoly in the social networking field since 2011 and that SnapChat was one of the few platforms comparable to Facebook and Instagram.
In response, Zuckerberg described the social media market as far broader than the government defines it. According to the Facebook founder, connecting friends and family is "one of the core things" the company does, but Meta also participates in "the shared idea of entertainment, learning about the world and discovering what's going on."
A moment of survival
Reuters noted that this lawsuit poses an existential threat to Meta, a company that, according to some estimates, derives about half of its US advertising revenue from Instagram.
Losing Instagram, in particular, could have serious consequences for the profitability of its parent company, Facebook. While Meta doesn't release specific revenue figures for each app, advertising research firm Emarketer predicted in December 2024 that Instagram would generate $37.13 billion . Instagram also generates more revenue per user than any other social media platform, including Facebook.
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Meta faces the risk of having to sell Instagram and WhatsApp if it loses the case. Photo: Reuters. |
WhatsApp has so far contributed only a small fraction of Meta's total revenue, but it is the company's largest app in terms of daily active users and is ramping up efforts to monetize tools like chatbots.
Meta countered that these deals benefited users and that the market is now highly competitive, with the rise of TikTok and other platforms. Meta's lawyers also stressed that reversing deals approved more than a decade ago would set a dangerous precedent.
The WSJ quoted legal experts who also warned that the FTC would have difficulty proving that Meta would not have achieved similar success without these acquisitions. More importantly, reversing mergers that were approved years ago is extremely rare.
On the FTC's side, the agency accused Meta of fearing the rapid growth of Instagram and WhatsApp, leading to overpaying for the acquisitions of both. Conversely, parent company Facebook argued that it faced fierce competition from numerous other platforms, particularly TikTok, and video was a key area of competition.
Source: https://znews.vn/mark-zuckerberg-dung-truoc-vu-kien-song-con-post1545870.html
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