The antitrust trial against Meta Platforms Inc. (META) continues Tuesday after CEO Mark Zuckerberg took the stand on Monday in a case he had long sought to sidestep. The tech giant faces off against President Trump's antitrust officials in a challenge that threatens the $1.3 trillion empire Zuckerberg built.
The Federal Trade Commission alleges that Meta’s leading social media platform, Facebook, became a monopoly in the market for "personal social networking" in part by buying up potential rival social media startups such as Instagram and WhatsApp.
Buying smaller rival social media companies, the FTC claims, was part of a "buy-or-bury strategy" to block fair competition. The FTC will likely ask the judge overseeing the case to force Meta to sell Instagram and WhatsApp if it wins.
Meta has argued that the FTC misidentified the market in which Facebook, Instagram, and WhatsApp compete because it left out TikTok, YouTube, X, and LinkedIn. Its lawyers have also noted that the FTC approved the Instagram and WhatsApp purchases more than a decade ago.
Mark Zuckerberg at the inauguration of Donald Trump as the 47th president of the United States on Jan. 20. Kenny Holston/Pool via REUTERS ·via REUTERS / Reuters
Zuckerberg, in court Monday, didn't agree with how the government defined the personal social networking market that it alleges Meta dominates, arguing it is more expansive than just a friends-and-family connection point.
He said that linking friends and family is "one of the core things" the company does, according to a report of the trial proceedings from the New York Times, but Meta is also involved in “the general idea of entertainment and learning about the world and discovering what’s going on."
An FTC lawyer confronted Zuckerberg with some old posts and emails written before the acquisition of Instagram.
One cited in court was from 2011, where the CEO told other executives that “mobile photos … will increasingly be the future of photos” and that Instagram had become "a large and viable competitor" in that realm, according to a report of the trial proceedings from CNN.
One key part of the FTC's argument is that Facebook purchased Instagram in 2012 because it "lacked the business talent" to maintain its market dominance through innovation as smartphones drew consumers toward mobile internet.
Chairman of the Federal Trade Commission. Andrew Ferguson, right, leaves the E. Barrett Prettyman United States Court House on Monday in Washington, D.C. (Photo by Alex Wong/Getty Images) ·Alex Wong via Getty Images
In another 2012 acquisition, according to the government, Facebook bought then-shuttered Google social app “Glancee" allegedly to foreclose on the search giant’s social networking ambitions.
The government claims these purchases of rivals expanded Meta's ability to surveil its users across the internet and, in turn, corner the online advertising market that fuels digital social platforms.
A spokesperson for Meta said the FTC’s lawsuit mischaracterizes Facebook as a monopolist by leaving out some of its main competitors within the social media market.
"The evidence at trial will show what every 17-year-old in the world knows: Instagram, Facebook, and WhatsApp compete with Chinese-owned TikTok, YouTube, X, iMessage, and many others," the spokesperson said.
"More than 10 years after the FTC reviewed and cleared our acquisitions, the commission’s action in this case sends the message that no deal is ever truly final. Regulators should be supporting American innovation, rather than seeking to break up a great American company and further advantaging China on critical issues like AI."
'The judge has not signaled he's on board'
The FTC first filed its complaint against Facebook during President Trump’s first term. It was dismissed by federal judge James Boasberg.
But Boasberg later accepted an amended complaint that was refiled during former President Joe Biden’s administration by then-FTC boss Lina Khan.
Regulators are now asking the judge to restore fair competition in the “personal social networking services" market by ordering Instagram’s divestment. They also have requested a court-ordered spin-off of Meta’s messaging service, WhatsApp.
A spin-off of Instagram would deal a major blow to Meta’s bottom line. The app drove $32 billion in US ad revenue for Meta in 2024, representing 48.4% of its total ad revenue, according to Emarketer.
In December, Emarketer projected that Instagram’s ad revenue would surpass 50% of Meta’s total revenue in 2025.
WhatsApp makes up a much smaller fraction of total revenue. Its business messaging service earned $1.7 billion in 2024.
Judge James E. Boasberg, chief judge of the Federal District Court in DC. (Photo by Carolyn Van Houten/The Washington Post via Getty Images) ·The Washington Post via Getty Images
Paul Swanson, a partner with Holland & Hart and head of the firm’s antitrust practice, said Judge Boasberg is clearly open to hearing the FTC’s theory yet also skeptical of it.
"The FTC has persuaded the judge that there are questions of fact here," Swanson said. "And that's an achievement in itself."
However, he said regulators may find it difficult to further persuade the judge that social platforms like LinkedIn don’t belong in the same market.
“It seems like already there's some concern from the court that the market we're talking about is too narrowly drawn. The judge has not signaled that he’s on board with their narrative,” Swanson said.
Even if Boasberg were to agree with the FTC’s narrowly defined market of personal social networking services, Swanson said, Meta’s share of daily and monthly active users is on the low end of significant enough monopoly to control pricing and output.
The FTC alleges that Facebook’s share of daily active users on US personal social networking apps exceeded 70% since 2016.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed.
