US government might dismantle Zuckerberg’s Meta, according to reports
The tech giant is facing an antitrust trial that could force it to sell Instagram and WhatsApp. The U.S. competition watchdog is attempting to dismantle social media powerhouse Meta, alleging that it unfairly maintained market dominance through...
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The tech giant is facing an antitrust trial that could force it to sell Instagram and WhatsApp.
The U.S. competition watchdog is attempting to dismantle social media powerhouse Meta, alleging that it unfairly maintained market dominance through the acquisition of Instagram and WhatsApp, according to multiple media reports.
These reports emerge as a landmark antitrust trial initiated by the U.S. Federal Trade Commission (FTC) commenced in a Washington federal court on Monday. The FTC has accused Meta of misusing its market power to eliminate potential competition through a “buy-or-bury strategy.”
Meta, which also owns Facebook, acquired the photo-sharing app Instagram in 2012 and the messaging platform WhatsApp in 2014. Although the FTC initially approved these purchases, it now contends that Meta overpaid—$1 billion for Instagram and $19 billion for WhatsApp—in a defensive maneuver aimed at stifling competition.
Should the judge rule in favor of the government, Meta could be compelled to divest itself of Instagram and WhatsApp. Analysts believe that other tech giants might face increased scrutiny as the pressure on Big Tech grows.
During opening statements, FTC attorney Daniel Matheson highlighted that Meta has been generating significant profits even while customer satisfaction has declined. The agency referenced emails from 2011 and 2012 in which Meta CEO Mark Zuckerberg indicated that the company could acquire Instagram, which he described as “growing quickly.”
Matheson referred to a 2012 message in which Zuckerberg highlighted the need to “neutralize” Instagram as “a smoking gun.”
Zuckerberg, who took the witness stand on Monday, asserted that the emails represented “relatively early” discussions regarding the acquisition and claimed that Meta has enhanced Instagram over the years.
On Tuesday, while continuing his testimony, Zuckerberg acknowledged that the company acquired Instagram because it possessed a “better” camera than the one Meta was developing.
Meta’s legal team dismissed the FTC’s allegations, contending that the company faces significant competition from platforms like TikTok, which is owned by a Chinese company.
This case is part of a wider crackdown on Big Tech that began during President Donald Trump’s first administration. The initial lawsuit, filed in 2020, was thrown out six months later.
Since Trump’s return to the White House, Meta has made various overtures to his administration, including contributions to the president’s inauguration fund and adjustments to its content moderation practices. In January, the company agreed to pay Trump $25 million to resolve a lawsuit concerning the suspension of his accounts after the 2021 Capitol riot. Zuckerberg has also made visits to the White House in recent weeks.
The outcome of this case could impact Meta’s 3.5 billion users who depend on Facebook, Instagram, or WhatsApp on a daily basis. However, experts suggest that with appeals likely from both sides, this lawsuit could extend for years.
Ramin Sohrabi for TROIB News
The U.S. competition watchdog is attempting to dismantle social media powerhouse Meta, alleging that it unfairly maintained market dominance through the acquisition of Instagram and WhatsApp, according to multiple media reports.
These reports emerge as a landmark antitrust trial initiated by the U.S. Federal Trade Commission (FTC) commenced in a Washington federal court on Monday. The FTC has accused Meta of misusing its market power to eliminate potential competition through a “buy-or-bury strategy.”
Meta, which also owns Facebook, acquired the photo-sharing app Instagram in 2012 and the messaging platform WhatsApp in 2014. Although the FTC initially approved these purchases, it now contends that Meta overpaid—$1 billion for Instagram and $19 billion for WhatsApp—in a defensive maneuver aimed at stifling competition.
Should the judge rule in favor of the government, Meta could be compelled to divest itself of Instagram and WhatsApp. Analysts believe that other tech giants might face increased scrutiny as the pressure on Big Tech grows.
During opening statements, FTC attorney Daniel Matheson highlighted that Meta has been generating significant profits even while customer satisfaction has declined. The agency referenced emails from 2011 and 2012 in which Meta CEO Mark Zuckerberg indicated that the company could acquire Instagram, which he described as “growing quickly.”
Matheson referred to a 2012 message in which Zuckerberg highlighted the need to “neutralize” Instagram as “a smoking gun.”
Zuckerberg, who took the witness stand on Monday, asserted that the emails represented “relatively early” discussions regarding the acquisition and claimed that Meta has enhanced Instagram over the years.
On Tuesday, while continuing his testimony, Zuckerberg acknowledged that the company acquired Instagram because it possessed a “better” camera than the one Meta was developing.
Meta’s legal team dismissed the FTC’s allegations, contending that the company faces significant competition from platforms like TikTok, which is owned by a Chinese company.
This case is part of a wider crackdown on Big Tech that began during President Donald Trump’s first administration. The initial lawsuit, filed in 2020, was thrown out six months later.
Since Trump’s return to the White House, Meta has made various overtures to his administration, including contributions to the president’s inauguration fund and adjustments to its content moderation practices. In January, the company agreed to pay Trump $25 million to resolve a lawsuit concerning the suspension of his accounts after the 2021 Capitol riot. Zuckerberg has also made visits to the White House in recent weeks.
The outcome of this case could impact Meta’s 3.5 billion users who depend on Facebook, Instagram, or WhatsApp on a daily basis. However, experts suggest that with appeals likely from both sides, this lawsuit could extend for years.
Ramin Sohrabi for TROIB News
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