Meta prevails in historic FTC antitrust case, won't have to break off WhatsApp, Instagram
“Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the Administration and to invest in America,” said Jennifer Newstead, chief legal officer, in a statement.
The social media landscape has changed so much since the FTC filed its lawsuit in 2020, Boasberg wrote, that each time the court examined Meta's apps and competition, they changed. Two opinions to dismiss the case — filed in 2021 and 2022 — didn't even mention popular social video platform TikTok. Today, it “holds center stage as Meta's fiercest rival.”
Quoting the Greek philosopher Heraclitus, “that no man can ever step into the same river twice,” Boasberg said the same is true for the online world of social media as well.
“The landscape that existed only five years ago when the Federal Trade Commission brought this antitrust suit has changed markedly. While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down,” he wrote.
Emarketer analyst Minda Smiley said Meta's win “is not necessarily surprising considering the lengths it’s gone to in recent years to keep up with TikTok.”
“But from a regulatory standpoint, Meta is far from out of the woods: next year, major social networks will face landmark trials in the US regarding children’s mental health,” she added. "Still, today’s win is surely a boost for the company as it battles criticism and questions over how its massive AI spending will ultimately benefit Meta in the long run.”
Facebook bought Instagram — then a scrappy photo-sharing app with no ads and a small cult following — in 2012. The $1 billion cash and stock purchase price was eye-popping at the time, though the deal’s value fell to $750 million after Facebook’s stock price dipped following its initial public offering in May 2012.
Instagram was the first company Facebook bought and kept running as a separate app. Up until then, Facebook was known for smaller “acqui-hires” — a type of popular Silicon Valley deal in which a company purchases a startup as a way to hire its talented workers, then shuts the acquired company down. Two years later, it did it again with the messaging app WhatsApp, which it purchased for $22 billion.
WhatsApp and Instagram helped Facebook move its business from desktop computers to mobile devices, and to remain popular with younger generations as rivals like Snapchat (which it also tried, but failed, to buy) and TikTok emerged. However, the FTC has a narrow definition of Meta’s competitive market, excluding companies like TikTok, YouTube and Apple’s messaging service from being considered rivals to Instagram and WhatsApp.
Investors didn't appear surprised at the ruling. Shares of the Menlo Park, California-based company were down $1.52 at $600.49 in afternoon trading Tuesday, in line with broader market trends.
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