FTC Argues Meta Must Sell Instagram, WhatsApp

The US Federal Trade Commission argued in court on Monday that Facebook parent Meta acquired Instagram and WhatsApp to avoid competition, and effectively established an illegal monopoly.

The FTC is arguing that Meta should be forced to restructure or sell parts of its business, including the two companies, in a Washington trial that is expected to last several weeks.

The trial is one of several being brought against large tech firms by the FTC and other US government agencies in an effort to rein in the companies’ market power.

‘Entry barriers’

FTC lawyer Daniel Matheson said Meta’s unlawful acquisition strategy “established entry barriers that for more than a decade protected Meta’s dominance”.

“Consumers do not have reasonable alternatives they can turn to,” added Matheson.

The case, filed during US president Donald Trump’s first term, poses an serious threat to Meta, which is estimated to earns about half of its advertising revenue from Instagram, according to Emarketer figures from December.

The company acquired Instagram in 2012 and WhatsApp in 2014, with Meta chief executive Mark Zuckerberg saying in emails that the acquisitions would reduce competition.

Zuckerberg and former chief operating officer Sheryl Sandberg are both expected to testify in the trial.

Meta has argued in court filings that the purchases of Instagram and WhatsApp benefited users, and that Zuckerberg’s comments are not relevant amidst competition from TikTok, YouTube and Apple’s iMessage.

The FTC is arguing that such services are not interchangeable, and that Meta holds a monopoly on services that allow users to share content with friends and family.

Market definition

It argues that TikTok, YouTube, Reddit and X, by contrast, are used to share content with people the users don’t know.

Meta’s main competition in the US are Snap’s Snapchat and a small privacy-focused app called MeWe.

Meta, for its part, has said the fact that Instagram and Facebook gained traffic during TikTok’s brief suspension in January shows direct competition.

In a November ruling, US District Judge James Boasberg said the FTC faces “hard questions” about whether its claims can be proven in court.

In recent months Meta has made overtures to the Trump administration, appointing a friend of the president to its board and dropping content moderation.

Zuckerberg approached Trump in person to have the FTC drop the case, the Wall Street Journal reported.

Meta said in a statement that it competes with TikTok, YouTube, X, iMessage and “many others”.