Meta’s antitrust trial could force Zuckerberg for sale Instagram

The trial in the historic antitrust case against the social media giant Meta opened on Monday in Washington.

Lawyers from the American competition supervision and consumers say that Meta illegally oust his rivals by buying Instagram and WhatsApp more than ten years ago.

“They decided that the competition was too hard and that it would be easier to buy their rivals than to compete with them,” said Daniel Matheson, lawyer for the Federal Commerce Commission (FTC).

Meta replied that the trial brought by the FTC, which has examined and approved these acquisitions, is “revealed”.

Meta “acquired Instagram and WhatsApp to improve and develop them alongside Facebook,” said business lawyer Mark Hansen.

A victory for the FTC could force CEO Mark Zuckerberg to dismantle the business.

This could include the separation of the Instagram photo sharing application and the WhatsApp messaging service.

The FTC claims that the company paid too much when it acquired Instagram for $ 1 billion in 2012. Two years later, it bought WhatsApp for $ 19 billion.

“The FTC’s argument is that Instagram acquisition was a way to neutralize this growing competitive threat to Facebook,” said Rebecca Haw Allensworth, professor of antitrust law at the Vanderbilt Law School.

According to Ms. Allensworth, Mr. Zuckerberg’s own words, including those drawn from her emails, could constitute the most convincing evidence during the trial.

“He said he was better to buy than compete. It is difficult to be more literal than that, ”says Ms. Allensworth.

Monday, Me Matheson referred to a Zuckerberg memo dating from 2012 in which he evokes the importance of “neutralizing” Instagram. Matheson called this message as “smoking pistol”.

Meta, for her part, said that purchases improve consumer experience.

“Acquisitions to improve and develop the business have never been deemed illegal,” said Hansen on Monday, and they should not be in this case. “

The company maintains that it is faced with competition from a large number of other applications, including Tiktok, X, Youtube and Imessage.

Mr. Zuckerberg and Sheryl Sandberg, the former director of operations of the company, should both testify during the trial, which could last for several weeks.

The case, FTC V Meta, was filed under the first administration of US President Donald Trump, but risks being politicized during his second term.

According to the Wall Street Journal, Mr. Zuckerberg put pressure in person on Mr. Trump so that the FTC abandons the case.

Questioned by the BBC to confirm this information, Meta eluded the question but said in a statement: “the proceedings initiated by the FTC against Meta defy reality”.

“More than ten years after the FTC examined and authorized our acquisitions, the action of the commission in this case sends the message that no agreement is never really final,” Meta spokesperson told the BBC.

Relations between Mr. Zuckerberg and Mr. Trump were in part because Mr. Trump was prohibited access to Meta’s social media platforms after the Capitol riot in January 2021.

Since then, relationships have been somewhat thawed.

Meta contributed to $ 1 million (764,400 pounds sterling) to the inauguration fund of Mr. Trump, and this year added to the Meta board of directors of the former advisor to Mr. Trump, Dina Powell McCormick, as well as the boss of the Ultimate Fighting Championship (UFC), Dana White, an ally of Mr. Trump.

The company also announced in January that it suppressed the independent fact auditors and that it had agreed to pay $ 25 million to Mr. Trump to settle a trial concerning the suspension of his accounts after the riots of January 6 at the Capitol in 2021.

The decision of President Trump to dismiss two commissioners of the FTC in March also weighs on the case.

As a Democrats, Rebecca Kelly Slaughter and Alvaro Bedoya were in the minority within the Commission which has five seats.

Until Wednesday, only two of these seats were filled, both by Republicans. Another republican was confirmed by the Senate on Thursday.

Slaughter and Bedoya – who are continuing the Trump administration to be reinstated – claim that the decision to remove them was to intimidate them.

“The president sent a very clear signal not only to us, but also to President Ferguson and the commissioner [Melissa] Holyoak: If they do something he doesn’t like, he can send them back too, “said Ms. Slaughter in a recent BBC interview.

“Thus, if they do not want to be of service to its political allies, they are also on the hot seat,” added Mr. Slaughter.

Ms. Slaughter and Mr. Bedoya both expressed their concern in the face of recent information about Mr. Zuckerberg’s lobbying activities.

“I hope there will be no political interference,” Bedoya told BBC.

The FTC did not respond to a request for comment from the BBC.

Mr. Ferguson, who was appointed president of the FTC by Mr. Trump, recently told The Verge that he “would obey legal orders” when he was asked what he would do if the president ordered him to abandon legal action like that brought against Meta.

Ferguson added that he would be very surprised if such a thing happened.

The FTC is considered one of the main antitrust surveillance organizations. In recent years, she has returned hundreds of millions of dollars to the victims of scams and has adopted laws prohibiting unnecessary costs and traps related to subscriptions.

But at a time when the Meta trial opens, it is one of the numerous independent regulatory agencies that the administration seems eager to weaken.

President Ferguson recently reaffirmed his conviction that independent regulation organizations “are not good for democracy”.

The FTC V Meta affair begins while another major antitrust case – USA V Google – is about to enter what is called the corrective measurement phase.

The Ministry of Justice won the first phase of this case last summer, when Judge Amit Mehta concluded that Google had a monopoly on online research, with a market share of around 90 %.

Last month, the Ministry of Justice reiterated a request made under the Biden administration, namely that a court breaks the Google monopoly in the field of research.

According to Laura Phillips-Sawyer, associate professor of business law at the University of Georgia, the FTC arguments against Meta will be more difficult to prove.

“I think they have a real battle to fight,” said Ms. Phillips-Sawyer about the FTC.

“They have a long way to go before considering any sale of Instagram or Whatsapp.”

Indeed, in relation to online research, there is more competition in the space of personal network services in which META operates, said Ms. Phillips-Sawyer.