(Bloomberg) — The US Federal Trade Commission is finally having its day in court against Meta Platforms Inc., arguing that the company must be broken up for illegally monopolizing the social media market after buying Instagram and WhatsApp more than a decade ago.
The FTC’s opening salvo began Monday in Washington before chief judge James Boasberg in a case that’s been years in the making. Agency attorneys are slated to deliver their opening arguments, countered by the company’s defense.
If the FTC prevails, a spinoff of Instagram and WhatsApp would undo years of integration between the apps, disrupt two of the most popular digital consumer products in the world and potentially erase hundreds of billions of dollars in Meta’s market value. It would also raise serious questions about how the government evaluates and approves deals.
While cautioning against over regulation, FTC Chair Andrew Ferguson said “the antitrust laws can help make sure that no private sector company gets so powerful that it affects our lives in ways that are really bad for all Americans” during an interview on Fox Business Monday morning. “That’s what this trial beginning today is all about.”
The trial is expected to last about two months and feature testimony from Chief Executive Officer Mark Zuckerberg and former executive Sheryl Sandberg.
The FTC argues that Meta’s purchases of Instagram and WhatsApp are “killer acquisitions” that prevented those companies from competing. To support its case that Meta is a monopoly, the FTC will argue that the quality of its apps has declined, most noticeably with increased ads and weakened privacy protections.
Meta has pushed back aggressively against the FTC’s claims, arguing that it competes intensely with a variety of platforms, including ByteDance Ltd.’s TikTok, Snap Inc.’s Snapchat, Google’s YouTube, Apple Inc.’s iMessage and Elon Musk’s X.
The FTC may have a tough time in court. Although Boasberg denied Meta’s motion to throw out the case in November, he said “prevailing here, however, does not obscure the fact that the Commission faces hard questions about whether its claims can hold up in the crucible of trial.”
Meta also argues that the FTC had a chance to challenge the deals — for Instagram in 2012 and WhatsApp in 2014 — and permitted them to proceed.
The FTC opened an investigation into Meta in 2019 during the first Trump administration and sued the company in December 2020. Former FTC Chair Lina Khan under the Biden administration advanced the case, which is now in the hands of Ferguson, who was named by President Donald Trump to head the agency in January.
The case will test the government’s ability to police competition in the fast-moving tech sector, which has evolved significantly. Since 2019, Musk purchased Twitter Inc., TikTok became one of the most dominant social media apps in the world, and Meta launched rival products to compete with both of them.
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