UPDATE, 9:40 a.m. PT: Meta’s lede attorney blasted the Federal Trade Commission’s antitrust case, telling a federal judge that it was a “grab bag” of theories that are “at war with the facts and at war with the law.”
In his opening statement, Mark Hansen accused the FTC of ignoring the competitive impact of TikTok on the marketplace, as the government argued that Meta’s primary competition in the market was Snap, given their offering of friends and family connection.
Hansen, though, said that the competitive field for Facebook and Instagram has expanded. He pointed to figures showing that users were spending a majority of their time with so-called “unconnected content,” the types of short form video not produced by family or friends.
He also pointed to what happened when TikTok was briefly shut down in January, as it reached a deadline for its U.S. operations to be sold given a law that the China-based parent had to divest. When was sworn into office, President Donald Trump extended the deadline.
During that period when TikTok was darn, data showed that users migrated to Instagram, YouTube and Facebook, which all have their own short-form video features. When Meta had an outage in 2021, he noted, users went to TikTok and YouTube, among others.
In the race to commend users’ time, the competitive landscape remains robust.
“These are things that all happened in the real world, showing what U.S. consumers do when they find a substitute,” Hansen told Judge James Boasberg, who is presiding over the trial.
Hansen also pointed to improvements that Meta has made to Instagram and Whats App since their acquisitions. Instagram, for instance, had just 3.9 million users at the time of purchase in 2012, and has 230 million today. WhatsApp operated outside the U.S. and required user payment at the time it was purchased in 2014. Now it is free, he noted.
The Meta attorney also challenged the notion that the company saw Instagram as such a threat that it needed to acquire it to remove competition. He noted that until its acquisition its co-founder, Kevin Systrom, relied on Facebook’s friends and family network as a driver of growth.
“Meta was under no obligation to provide free distribution to Instagram,” but it continued to do so, Hansen said. He called it “wild speculation” that Instagram and WhatsApp would still have grown into robust rivals to Meta had the acquisitions not occurred.
PREVIOUSLY: An attorney for the Federal Trade Commission told a judge Monday that Facebook, fearing the competitive threat that Instagram posed to its social media network, acquired it as a way to “neutralize” the rival.
“They decided that competition was too hard,” the FTC’s attorney, Daniel Matheson, said in his opening statement in the government’s antitrust case against the Meta Platforms social media empire.
He argued that with Meta’s monopoly in social media, “consumers do not have reasonable alternatives they can turn to,” even as satisfaction has declined.
At stake is the potential breakup of Facebook parent Meta, as the government has zeroed in on the 2012 acquisition of Instagram and 2014 purchase of WhatsApp.
The FTC sued Meta in 2020, during Donald Trump’s first term, claiming that the social media giant had sought to maintain its dominance at a time when mobile and cloud computing posed a new threat to Facebook’s business.
In his opener, Matheson said that in 2010, Facebook was faced with “a dramatic sea change of competitive conditions” given the shift to mobile services. The company, he said, struggled to create its own mobile photo app. The government’s attorney, though, said that the threat was greater, as they “knew that Instagram was building a parallel network.”
Matheson pointed to an often-cited 2012 email that Meta CEO Mark Zuckerberg sent, in which he wrote that they needed to “neutralize a potential competitor.” “What we’re really buying is time,” Zuckerberg wrote in the email.
The government’s lawyer referred to the email as a “smoking gun” but said that the FTC had a trove of additional evidence to prove its case. He said that after the Instagram purchase, Facebook shelved a new application, Facebook Camera, that would have rivaled the photo app.
The government is expected to call Zuckerberg as a witness later today, in what is likely to be a highlight of the trial. Up until recently, Zuckerberg had been a frequent target of Trump’s attacks. Trump last year even called for him to be jailed if the Meta platforms influenced the outcome of the 2024 election. More recently, though, Zuckerberg has tried to make nice with Trump, with Meta donating to his inaugural fund, overhauling its D.C. lobbying shop and ending fact-checking. Zuckerberg has reportedly sought to settle the case.
Meta has argued that it faces an expanding amount of competition, including from Snap, X and TikTok, while pointing out that its acquisitions of Instagram and WhatsApp were approved by federal regulators.
In his opening statement, though, Matheson argued that the relevant market is much narrower, describing the prominent market participants as Facebook, Instagram and Snap. The latter, Matheson noted, Facebook attempted to buy in 2013.
Meta’s services are free, but Matheson argued that the social media giant “has a monopoly over the friends and family experience,” noting that the cost of switching is amassing a new network of connections. He rejected Meta’s contention that its Facebook and Instagram services go well beyond friends and family sharing, as it offers messaging apps and short form AI driven video Reels. Matheson noted that when news users attempt to log in, they are urged to sign up to “connect with friends, family and the people you know.”
Citing a 2018 internal email, Matheson also argued that, since its acquisition, Meta has reduced promotional activity on Instagram out of concern that it would grow too large and harm Facebook, which is more profitable.
This article was published by Ted Johnson on 2025-04-14 13:07:00
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