‘I think we misunderstood’: Meta’s mega antitrust trial begins
Meta could be forced to break up its mega platforms Facebook, Instagram and WhatsApp with the start of its long-anticipated antitrust trial in the US.
Lawyers for the Federal Trade Commission (FTC) allege that Meta has an unfair advantage over rivals, following its purchase of Instagram and WhatsApp a decade ago.
“They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them,” said Federal Trade Commission (FTC) lawyer Daniel Matheson.
At the heart of the trial is the question of who actually competes with the company that reaches around half the world’s population every month.
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Meta argues that it operates in a “dynamic and hypercompetitive space” and that the FTC is wrong in its claims that Meta has a dominant share in the market. It has accused the FTC of creating a fictitious market with Facebook and Instagram only competing with Snapchat and MeWe. Instead it says that more time is spent on YouTube and TikTok than its own products and once those apps are considered, Meta has less than a thirty per cent market share.
Meta doesn’t report the revenue split between the individual apps, but in the 2024 end of year financial report, it says it made US$162 billion from the ‘Family of Apps’ (which includes Facebook, Instagram, WhatsApp, and Messenger) in 2024, with most of this coming from advertising. It made US$2.15 billion from Reality Labs, which develops VR and AR hardware and software.
The value of Meta is increasingly found in apps beyond the Facebook platform with users sharing personal updates via private messages instead of the public-facing news feed.
Meta report that personal updates represent a small volume of engagement on the platform with personal contact engagement only accounting for 20% of Facebook and 10% of Instagram activity. The rest of the engagement is with accounts seen in their feeds based on interests.
Back in 2018, Facebook implemented changes that would prioritise news feed activity around posts from family and friends, while reducing the volume of native posts by publishers and brands. It was a move the company now views as a mistake.
In his testimony, Zuckerberg said that the company failed to recognise the shift in user behaviour: “I think we misunderstood how social engagement online was evolving.”
“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” Zuckerberg said.
The case is the third big-tech antitrust lawsuit to go to trial in the past two years following two suits against Google. Last year a federal judge ruled against Google, claiming it had maintained a monopoly on Internet search. Arguments over remedies, which may involve a break-up of Google services, will be heard next week. Another trial against Google for monopolising ad-tech is still being considered by a federal judge.
There is also an antitrust lawsuit filed by the Department of Justice against Apple, with the tech company accused of making it hard for consumers to leave its walled garden to use competing software and hardware. Amazon is also facing an FTC trial over claims of deceptive practices related to Prime membership sign-ups.
Looming over all of these cases is the antitrust case against Microsoft in the late 90s. Microsoft was accused of anti-competitive behaviour. The Department of Justice settled with the company in 2001 and allowed Microsoft to keep the company intact, but blocked it from making deals with PC makers and ISPs. Microsoft was also forced to share parts of its source code with third-party software developers to make their apps available on Windows.
The FTC v Meta case was filed during the first Trump administration, with the relationship between Meta CEO Mark Zuckerberg and Donald Trump having become much closer since. Zuckerberg donated US$1m to Trump’s inauguration fund and has since added Trump adviser Dina Powell McCormick and Trump ally Dana White to Meta’s board of directors early this year. Zuckerberg was also seated on stage at Trump’s inauguration.
Early this year, Meta agreed to a US$25 million legal settlement with Donald Trump over the suspension of his accounts after the 2021 riots at the Capitol building. The payment for suspending an account on a private platform – conforming to its own conditions – has been interpreted by some commentators as an attempt to influence the president.
