Mega court case has begun: Meta tries to prevent break-up
Facebook bought Instagram and WhatsApp over ten years ago, and the US government wants to reverse the deal. The process began with Zuckerberg himself.
Facebook has long been called Meta, Instagram and WhatsApp are central components of the corporate empire
(Image: Tada Images/Shutterstock.com)
A court case against Meta began in Washington, D.C. on Monday, which in the most extreme case could result in the Facebook parent company losing Instagram and WhatsApp. To prevent this from happening, Meta CEO Mark Zuckerberg personally testified at the start of the proceedings and defended his company. The New York Times quotes him as saying that the company does not have a monopoly position in the area of social networks for contact with family and friends because it is much larger than the FTC claims. The US trade regulator has filed the lawsuit and insists that Instagram and WhatsApp only have Snapchat and a service called MeWe as competition in this area.
Problematic emails from Zuckerberg
According to reports from the courtroom, Zuckerberg was shown his emails from before the takeovers of Instagram and WhatsApp, in which he acknowledges their strong growth. In 2012, he talked about how important it was to “neutralize a potential competitor” with Instagram. He later explained that the photo service had “grown so much faster than us” that it had to be bought. Shortly before the takeover, he wrote that Instagram would continue to operate, but that no functions would be added, according to the New York Times. Zuckerberg admitted that there was a need for haste at the time, and pointed out that Instagram was indeed being further developed.
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The FTC representative explained, among other things, that it has been US government policy for more than 100 years to encourage companies to compete if they want to be successful: “We are here now because Meta has broken this agreement.” The company had decided that competition was too strenuous and that it would be easier to simply buy rivals. Because Meta's applications can be used free of charge, the FTC wants to prove that users would be harmed in other ways, for example because they would see more advertising on Instagram than if there was actually competition, writes Politico. On top of this, there would then be more innovation.
The trial is expected to last several weeks; Judge James Boasberg has already set trial dates until the beginning of July, writes the news agency dpa. Mark Zuckerberg is due to testify again on Tuesday. It could even take years before the case is finally resolved, and it is likely that the losing party will appeal. The lawsuit was filed in December 2020, during Donald Trump's first term in office. Boasberg rejected this first version with humiliating words for the FTC lawyers, but the agency stuck to the plan under Joe Biden and returned with many figures.
In the new complaint, the FTC pointed out that from 2016 to 2020, Facebook had an average market share of 80 percent of daily active users on smartphones and 98 percent on PCs. At no time and on no device type did the share fall below 70 percent. Should the authorities actually be able to convince the court that the takeovers need to be reversed, this would have massive consequences for Meta. Meta generates around half of its advertising revenue on Instagram, and WhatsApp is the Group's largest application in terms of daily active users.
(mho)
