In This Article:
Meta's (META) antitrust trial begins on Monday as the Federal Trade Commission (FTC) challenges the company's past acquisitions of Instagram and WhatsApp, arguing they unfairly cemented Meta's social media monopoly.
Chamber of Progress founder and CEO Adam Kovacevich joins Morning Brief to discuss what's at stake and whether divestment is truly on the table.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Adam, great to speak with you here.
Any chance of Instagram, WhatsApp, actually getting divested?
Sure, there's a chance. We don't know. I think the judge in this case has said that the FTC has kind of an uphill battle here. Um, they have to do two things. The FTC has to do two things. First they have to prove that meta has a monopoly in what in the relevant market which the FTC has said is personal social networking. The challenge for the FTC with that is they say that market includes Facebook, Instagram, Snapchat, company called MeWe, but the FTC says that it does not include LinkedIn, Reddit, X, TikTok, YouTube. And of course meta will push back on that saying that actually the market's much bigger, right? But the second thing that the FTC has to do is they have to prove that meta's acquisitions of Instagram and WhatsApp helped meta maintain a monopoly position through unfair competition. And as you said like, these are these are 11 year old, 12 year old acquisitions. Uh, in some ways, I think what the government's asking for is a little bit of a do over here of the regulatory approval that they gave, you know, uh, 11 years ago, 13 years ago.
What does the government really want in terms of some type of of defining change to how the company operates here?
Well, it's pretty clear that they want Instagram and WhatsApp to be spun off from meta. Like that is the clear objective of the case because they are saying that the essentially the the acquisitions of of these companies 11 years ago, 12 years ago, uh gave, you know, meta sort of an unfair position. I think the problem, the most inconvenient fact for the government here is that the FTC looked at both of these acquisitions at the time they were implemented and approved them. And and I think it's important to say, like, these are really small companies at the time they were approved, right? You had, you know, something like Instagram had like three or four million users and WhatsApp had this very small number of users. Now, you know, under meta, they've grown those to hundreds of millions of users, right? So meta's going to say that it provided scope and scale for these services to grow and that that wouldn't have happened if both companies had remained independent.
