Meta rested its case on Wednesday in an antitrust trial in which the U.S. government has accused the company of illegally snuffing out nascent competition by purchasing Instagram and WhatsApp.
Meta’s lawyers spent roughly four days trying to convince Judge James E. Boasberg of the U.S. District Court for the District of Columbia that the government’s case, which claims that the company had overpaid for the rival apps in a “buy or bury” strategy, was faulty.
Meta mounted its defense in Federal Trade Commission v. Meta Platforms by calling a handful of experts in economics and marketing, as well as current and former employees. They testified that the company formerly known as Facebook still faced plenty of competition and that its acquisitions of Instagram and WhatsApp had ultimately benefited those apps.
Here are Meta’s main arguments.
Meta faces hefty competition
The F.T.C.’s case claims that Meta competes only with other services that connect people with their friends and family. That makes Snap’s Snapchat app the only significant rival, the government has said.
But Meta argued that wasn’t true: The company also competes with services like YouTube and TikTok, which are more focused on entertaining consumers, it said. And iMessage, the messaging app that comes installed on millions of Apple products, is a primary competitor to WhatsApp, Meta’s lawyers said.
Meta hired an expert, the University of Chicago professor John List, who installed software on the phones of 6,000 participants in an experiment that tracked how much time they spent using individual apps.
Mr. List paid some of those people $4 for every hour they pared back their use of Facebook, Instagram and WhatsApp. He found those participants ended up spending more time other places, including Google Chrome and YouTube.
Meta’s experts also testified that when people cannot use TikTok, for reasons including an outage or ban, they turn to Meta’s apps instead.
Meta helped build Instagram and WhatsApp
To counter the F.T.C.’s claim that Meta snuffed out potentially vital competitors when it bought Instagram for $1 billion in 2012 and WhatsApp for $19 billion two years later, Meta argued that the company had worked to make those apps better.
Meta called Brian Acton, a founder of WhatsApp who left in 2018, to testify that the app had benefited under the bigger company. Mr. Acton said that Google raised the prospect of buying WhatsApp, but that Meta was a better fit for the app, which had built a large international following by the time it was acquired in 2014.
“In my brief discussions with Mr. Zuckerberg, there was a lot more concern and alignment for user experience and communication and network effects and everything else that revolves around building a communications experience,” Mr. Acton said, mentioning Facebook founder Mark Zuckerberg, who testified earlier in the trial.
Under cross-examination by a lawyer from the F.T.C., Mr. Acton acknowledged that WhatsApp could have added features, like voice calling, whether or not it had been acquired by Meta.
Nick Shortway, a director of product engineering for Meta, testified that Instagram had accelerated its development with access to new resources after its acquisition. Dennis Carlton, a professor emeritus at the Booth School of Business at the University of Chicago, testified that Instagram had not been good at generating revenue from its service before the Meta acquisition.
“It gained a lot from Facebook’s ability to monetize,” Mr. Carlton said.
In a statement, Chris Sgro, a spokesman for Meta, said: “After six weeks trying their case to undo acquisitions made over a decade ago and show that no deal is ever truly final, the only thing the F.T.C. showed was the dynamic, hypercompetitive nature of the past, present and future of the technology industry.”
The F.T.C. did not immediately respond to a request for comment.
What has the judge said?
Judge Boasberg signaled this week that he was grappling with the question of what companies Meta competed with, and is focused on the largest players like YouTube and TikTok.
Last week, Meta filed a motion asking Judge Boasberg for an expedited ruling, arguing that the F.T.C. did not effectively prove its case.
Judge Boasberg ruled against Meta’s motion on Tuesday, saying there “would have to be a very clear failure of the evidence on the plaintiff’s part for me to grant what would amount to a directed verdict, and that’s not something I’m prepared to do at this juncture.”
David McCabe is a Times reporter who covers the complex legal and policy issues created by the digital economy and new technologies.
Mike Isaac is a technology correspondent for The Times based in San Francisco. He regularly covers Facebook and Silicon Valley.
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