Instagram WhatsApp purchase – Meta antitrust trial starts: A decade ago, Mark Zuckerberg acquired photo sharing app Instagram and instant messaging app Whatsapp for what were whopping sums. It was frowned upon at the time as an attempt by Facebook – the company that would be renamed Meta in 2021- as a way to kill off potential competition. Now, that issue is coming back to bite Zuckerburg, as an antitrust case filed by US Federal Trade Commission or FTC starts its blockbuster trial from Monday (Apr 14).
Meta antitrust case: Will Meta lose Instagram, WhatsApp?
If FTC wins, Meta will have to sell Instagram and WhatsApp.
But the trial could last for weeks, and Meta is determined to push back against having to divest WhatsApp and Instagram.
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FTC is a powerful, independent agency whose primary responsibility is enforcing antitrust laws and consumer protection. In its court filings, the FTC alleged that the acquisitions of Instagram and WhatsApp violated the competition laws of the US. It said that Meta is monopolising the personal social networking market.
After their acquisition by Facebook, WhatsApp and Instagram became the social media giant’s crown jewels, helping Meta evolve into one of the Big Tech giants.
In spite of the rise of rivals, Instagram is still dominant in the photo and video sharing space, while WhatsApp is practically unrivalled on the personal messaging front.
How will the Meta antitrust case unfold? Who will testify?
A court in Washington will hear FTC’s case, in which the top executives of Meta’s rivals Tiktok, Snap Inc, and YouTube are expected to testify.
For Meta, former Chief Operating Officer Sheryl Sandberg, Instagram cofounder Kevin Systrom and other former and current officials will take the stand besides Zuckerberg.
What is the FTC saying about Meta’s acquisition of WhatsApp and Instagram?
Instagram was bought by Facebook for a then-unprecedented sum of $1 billion in 2012.
Two years later, Facebook acquired WhatsApp, the rising star of instant messaging, for an even more eye-watering $19 billion.
The FTC is seeking to cleale off the two crown jewels from Meta, saying it should not have been allowed to make these acquisitions.
“Acquiring these competitive threats has enabled Facebook to sustain its dominance—to the detriment of competition and users—not by competing on the merits, but by avoiding competition,” the FTC said in a legal filing.
What is Meta saying about the acquisitions of WhatsApp and Instagram?
Meta, headquartered in Menlo Park, California, said in a pretrial argument that it was not a monopoly.
It claimed that the acquisitions of Instagram and WhatsApp had not harmed competition.
It would insist in the trial that Instagram users had a better experience since it was taken over.
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But FTC is arguing that these acquisitions were done to eliminate competition.
Back when these acquisitions were made, the FTC had approved it, with the caveat that it would continue to monitor the results of the purchases.
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According to reports, Zuckerberg’s emails at the time of the acquisitions will play out in court as evidence.
As per some of these emails, he said that it would be better to buy the rivals than to compete with them.
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