Meta Platforms (META) is preparing for the start of a courtroom antitrust battle Monday with the US government in a case that could force Mark Zuckerberg to break up his $1.3 trillion empire and sell one of its crown jewels: Instagram.
If Zuckerberg is not able to convince President Trump to settle before the trial begins in a Washington, D.C., court before US judge James Boasberg, Meta will become the second Silicon Valley giant in two years to face off against the government’s antitrust watchdogs.
The first was Alphabet’s Google (GOOG, GOOGL), which battled the Justice Department in court during parts of 2023 and 2024. Federal judge Amit Mehta ruled last August that Google illegally monopolized online markets for “general search” and “general search text.”
The final decision on what happens to Google’s $2 trillion empire will be determined this year in a separate “remedies” phase of the search trial. Trump’s DOJ has stuck to a Biden-era request to break up Google, calling for divestment of its Chrome browser, while standing down on a push for the tech giant to sell off its AI investments.
There could be more clashes to come. Federal prosecutors are still working up antitrust cases in pre-trial phases against Apple (AAPL), Amazon (AMZN), and Microsoft (MSFT).
The DOJ has also alleged Google illegally monopolized the online advertising technology market in a separate antitrust trial still awaiting a judge’s decision.
The government’s case against Meta centers on the Federal Trade Commission’s claims that its leading social media platform, Facebook, used monopoly power to buy up, rather than compete with, smaller rival social media companies.
Facebook acquired Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion. Both mergers were given a green light by the FTC, following reviews.
“[It] is better to buy than compete,” Zuckerberg allegedly wrote in an internal company email in 2008, according to the government’s case.
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.
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.
Facebook also bought the controversial market intelligence service Onavo in 2013. That, according to the FTC, helped Facebook identify increasingly popular mobile apps, including WhatsApp and a polling app called “tbh.”
Later, in 2016, Facebook bought and shuttered a music video creation app called Eyegroove after learning that its rival Snapchat had interest in purchasing it, according to the FTC.
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.
“Facebook has systematically tracked potential rivals and acquired companies that it viewed as serious competitive threats,” the FTC has alleged, claiming the actions violated Section 2 of the Sherman Act.
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 FTC first filed its complaint against Facebook during President Trump’s first term. It was dismissed by Boasberg.
But Boasberg later accepted an amended complaint that was refiled during former President 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 $1.3 trillion in total 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.
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.
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