Meta Chief Executive Mark Zuckerberg returned to Washington this week, testifying in a landmark trial that could force the world’s largest social network to break off Instagram and WhatsApp.
The outcome of the high-stakes case between Meta and the Federal Trade Commission could unwind some of the company’s most lucrative acquisitions, disrupt its ads business and reshape the future of social media.
The highly-watched antitrust trial also comes as Zuckerberg and other tech executives try to curry favor with the Trump administration.
“This case could go either way,” said Rebecca Haw Allensworth, a professor at Vanderbilt Law School who studies antitrust law. “There’s some strengths of the government’s case, and there’s also one big weakness that we can expect Meta to really exploit.”
Meta says it faces competition from apps such as TikTok and YouTube, but the FTC says video apps are different from personal social networking services.
Meta and the FTC didn’t respond to a request for comment. More than 3 billion people use one of Meta’s apps daily, including Instagram and WhatsApp.
Here’s what to know about the legal showdown:
What is the FTC’s antitrust case against Meta about?
The FTC alleges that Meta maintained monopoly power in personal social networking services in the U.S. by illegally acquiring its rivals including Instagram and messaging app WhatsApp.
Meta’s “better to buy than compete” strategy suppressed innovation and also harmed consumers and advertisers because they have fewer choices, the agency said in its 2021 amended complaint against Facebook, which later rebranded itself as Meta.
The FTC and Meta have clashed over how the government defines the relevant market. The agency says that personal social networking services include apps such as Snapchat and MeWe but not TikTok, YouTube or Twitter, now X. That’s because people aren’t downloading apps like TikTok to stay connected with family and friends but to post content for users they don’t know.
Still, the case will be challenging for the FTC to win, said Jennifer Huddleston, a senior fellow for technology policy at the libertarian think tank Cato Institute.
“It’s trying to show that Facebook has monopoly power and what it defines as personal social networks, but that doesn’t really fit what consumers experience when they look at social media,” she said.
What’s Meta’s response?
Meta called the FTC’s case against the company “weak” and said it “ignores reality.”
The social network said in a blog post that the company competes with apps including YouTube and TikTok.
While allowing people to connect with family and friends is a top priority for Meta, Zuckerberg told the courtroom that “we’ve always been a service that lets you discover and learn about what’s going on in the world,” Bloomberg reported.
The company also said its multibillion-dollar investments in Instagram and WhatsApp helped fuel their popularity. If Meta is forced to divest Instagram and WhatsApp, the government would be sending the message to businesses that “no deal is ever final.”
What’s at stake for Meta?
Forcing Meta to sell Instagram and WhatsApp would be a big blow to its business, analysts say.
“Instagram really is its biggest growth driver, in the sense that it has been picking up the slack for Facebook for a long time, especially on the user front when it comes to young people,” said Jasmine Enberg, vice president and principal analyst at eMarketer who covers social media. “Facebook hasn’t been where the cool college kids hang out for a long time.”
Instagram’s U.S. ad revenue this year is expected to reach $37.67 billion, making up about half of Meta’s total ad revenue nationwide, according to eMarketer. While WhatsApp makes up a smaller chunk of Meta’s revenue, businesses also use the messaging app to drive sales and customer support.
Both apps have a massive audience. Instagram has more than 2 billion monthly active users globally. WhatsApp also has more than 2 billion users globally, roping in people not only in the United States but across developing countries.
Facebook purchased Instagram in 2012 for roughly $1 billion. The social network then bought WhatsApp for $19 billion in 2014.
How will this affect the social media landscape?
Some analysts say breaking up Meta could open the door for more rivals.
“We’d likely see a renaissance of social media startups looking to grab a piece of the new social media world order,” said Mike Proulx, vice president and research director at Forrester, a research and advisory firm based in Massachusetts, in a statement.
Others noted that getting people to move to another social media app is an uphill battle.
“It’s a huge question mark,” Enberg said. “The reality is that starting or launching a social app is not easy and then getting it to stick is even harder.”
Isn’t this déjà vu for Zuckerberg?
Yes. Zuckerberg has gone head-to-head with both the FTC and lawmakers in the past. In 2022, Zuckerberg testified in a case in which the FTC tried to block Meta’s purchase of Los Angeles-based Within Unlimited, the company that created VR fitness app Supernatural. A California judge sided with Meta in 2023, allowing the social media company to close the deal.
Zuckerberg also testified in an intellectual property trial in 2017 that accused Oculus, which Facebook purchased, of stealing technology from ZeniMax Media to create its virtual reality headsets. A jury initially ordered Facebook to pay $500 million to ZeniMax, but the company appealed and the lawsuit was eventually settled.
The 40-year-old tech mogul has also appeared before Congress, facing questions from lawmakers about data privacy and child safety concerns.
Will Zuckerberg’s attempts to cozy up to Trump help Meta?
The FTC’s antitrust case started during President Trump’s first term. In 2020, the agency sued Facebook. A federal court dismissed the case after ruling the agency failed to provide enough facts to prove that Facebook held a monopoly in personal social networking. During Biden’s administration in 2021, the FTC filed an amended complaint.
Zuckerberg, who previously criticized Trump during his first term, has been trying to mend his relationship with the president.
“It’s clear Zuckerberg is trying to make it worth his while, but so far, it appears not to have worked, because this case is going forward,” Allensworth said.
What’s next?
U.S. District Judge James Boasberg is presiding over the case and the trial is expected to go on for several weeks. Meta executives and other witnesses will likely be called to testify in the trial.
The post Behind the landmark trial that could reshape Meta’s future with Instagram appeared first on Los Angeles Times.
