The U.S. Federal Trade Commission Takes on Meta ⇥ nytimes.com

Cecilia Kang, Mike Isaac, and David McCabe, New York Times:

The case against Meta could affect its 3.5 billion users, who on average log on to Facebook, Instagram or WhatsApp multiple times a day for news, shopping and texting. Instagram and WhatsApp have attracted more users in recent years as Facebook, Meta’s flagship app, has stopped growing.

“For more than 100 years, American public policy has insisted firms must compete if they want to succeed,” said Daniel Matheson, the F.T.C.’s lead litigator in the case, in his opening remarks. “The reason we are here is that Meta broke the deal.”

“They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them,” he added.

Lily Jamali, BBC News:

Meta countered that the lawsuit from the FTC, which reviewed and approved those acquisitions, is “misguided.”

Meta “acquired Instagram and WhatsApp to improve and grow them alongside Facebook,” the company’s attorney Mark Hansen argued.

To my layperson’s eyes, this does not seem like a counterpoint to the FTC’s arguments as much as it is a reframing of them.

Jennifer Newstead, Meta’s chief legal officer:

In order for the FTC to win this case, they need to prove both that Meta has a dominant share in a properly defined product market that includes all competitors, and that the two acquisitions harmed competition and consumers. They are wrong on both claims. That’s why they’ve gerrymandered a fictitious market in which Facebook and Instagram compete only with Snapchat and an app called MeWe. In reality, more time is spent on TikTok and YouTube than on either Facebook or Instagram – if you only add TikTok and YouTube into the FTC’s social media market definition, Meta has <30% market share.

This is going to be a fascinating trial. It seems clear based on evidence in emails, chats, and underhanded tactics that Instagram and WhatsApp were acquired to neutralize their competitive power. Yet we have no idea what the tech landscape of today would look like had both remained independent companies. Meta’s products still have competition from other social networks and, in theory, it must fight them for every user-minute and ad dollar. However, we know for certain Meta does not need to compete today against Instagram and WhatsApp.