A U.S. district judge in Washington has ruled that Facebook parent Meta Platforms did not violate antitrust laws when it acquired photo-sharing app Instagram and messaging service WhatsApp more than a decade ago.
The decision was a defeat for the Federal Trade Commission, the US antitrust watchdog, which sued Meta in 2020, arguing that the company secured a social media monopoly by buying its competitors.
“Ultimately, the court finds that the agency failed to meet its burden: Meta does not have a monopoly in the relevant market,” Judge James Boasberg wrote Tuesday.
The company welcomed the decision in a statement provided to the BBC, saying it “recognizes that Meta faces intense competition.”
In April, Judge Boasberg presided over a lengthy trial that featured testimony from Meta CEO Mark Zuckerberg and former COO Sheryl Sandberg, who argued that TikTok and YouTube rocked the social media landscape.
In his decision, Judge Boasberg noted that the Federal Trade Commission reviewed and approved Instagram's 2012 acquisition of Meta and its 2014 acquisition of WhatsApp.
The agency argued that the company overpaid when it bought Instagram for $1 billion and WhatsApp for $19 billion.
Judge Boasberg described the ever-changing social media landscape: “Apps come and go, chasing one fad and moving away from others, and adding new features every year.
Even if Meta had monopoly power in the past, he said, the FTC has failed to demonstrate “that it continues to have that power now” because Meta's market share “appears to be declining.”
In a statement to the BBC, the Federal Trade Commission said it was unsure whether it planned to appeal.
“We are deeply disappointed by this decision,” said Joe Simonson, communications director for the Federal Trade Commission, adding that the agency is considering all options.
Simonson also told the BBC that “the deck was always stacked against Judge Boasberg and me”, who collided several times with the Trump administration and faces attempts by congressional Republicans to impeach him.
The BBC asked Judge Boasberg to comment on the situation.
With Tuesday's victory, Meta avoided a potential breakup of the company, which could include the spinoff of Instagram and WhatsApp.
“Our products benefit people and businesses and exemplify American innovation and economic growth,” a Meta spokesman told the BBC on Tuesday. “We look forward to continuing to partner with the administration and invest in America.”
The decision comes after the Justice Department won two previous antitrust cases against Google – one over its online search monopoly and the other over its advertising technology.
But earlier this year, another district judge in Washington hearing an online search case refused to force Google to spin off its Chrome browser. The Justice Department suggested the move was necessary to end the tech giant's search monopoly.
Against this backdrop, Tuesday's ruling against the Federal Trade Commission “really feels like a change in dynamics,” said Rebecca Howe Allensworth, an antitrust law professor at Vanderbilt Law School.
“I think it will impact the likelihood of more cases like this being brought.”
However, Allensworth added, the decision does not mean the government's efforts to crack down on antitrust behavior are failing.
“It's a mixed bag,” she said.
Many legal observers say the FTC's case against Meta was complicated from the start.
The case “has always been difficult, especially given how quickly we've seen the social media market change in recent years,” said Laura Phillips-Sawyer, a professor at the University of Georgia School of Law.
Still, she said, the case revealed “a series of statements by Zuckerberg during these acquisitions that appeared to be a desire to quell an emerging threat to Facebook's dominance.”
Meta's legal woes are not over yet.
Zuckerberg has been ordered to testify in a landmark trial about the impact of social media on youth.
Last month, Los Angeles County Superior Court Judge Carolyn Kuhl rejected Mehta's argument that the in-person appearance in January was unnecessary.
Instagram chief Adam Mosseri is also due to testify at the trial, which involves allegations that Meta and other social media companies are making their apps addictive to young people, despite being aware of the mental health risks.
