The trial of the Federal US Trade Commission against META begins in Washington on Monday, when the technological giant fights to avoid spinoff on Instagram and WhatsApp. FTC claims that the finish line illegally acquired two startups to suppress the competition.
Meta (then Facebook) bought a startup of providing Instagram photos for $ 1 billion in 2012. About two years later, the company kidnapped WhatsApp chat tools for about $ 22 billion.
FTC, one of the national law enforcement bodies, wants judge James Boasberg to attract a technological giant to implement these mega offers to illegally maintain the monopoly on social media. He called Boasberg to restore competition, ordering the finish line for sale of valuable assets. The government’s victory may be stopped by immense technology companies to obtain startups in the future, limiting the key source of innovation and return on investment for Venture Capital.
The initial process can last up to 37 days, packing until the beginning of July. If necessary, the process of deciding on penalties will take place – clearly next year. An additional years may take an appeal against any rulings. So WhatsApp and Instagram are not on sale in the near future. But the possibility of losing two valuable properties helps to explain why Mark Zuckerberg apparently he has I discovered a contract with President Donald Trump and the White House officials to prevent the fight in court. So far, these efforts seem unsuccessful.
Here’s what to expect as the trial begins.
What is FTC about?
First of all, FTC must prove that Facebook has long had a monopoly on “providing personal social network services in the USA” According to his lawsuit. The Facebook category allegedly monopolized includes such services as Snapchat and little -known gaming, but in particular excludes YouTube, Tiktok and other platforms, which FTC considers to watch movies by creators more than following family and friends. In the years 2012–2020 Facebook commanded over 80 percent of users’ time annually on this narrowly defined market.
Secondly, he must show acquisitions that will harm competition on the social network market. Around the time when talks on Instagram and WhatsApp began, Facebook was afraid of the threats of what startups of the application put for their monopoly, in accordance with the lawsuit. Referring to E -Mail between Zuckerberg and other company directors – such as the writer Zuckerberg, when “better to buy than compete” – FTC claims that the company decided to buy the emerging competitors to get more time to find their own application development strategy. “Unable to keep the monopoly through quite competing, the company’s management dealt with the existential threat, buying new innovators who were successful when Facebook failed,” says the lawsuit.
FTC claims That after purchasing Instagram and WhatsApp Facebook had fewer applications they pinched on the heels and did not provide users with less data privacy and more buggy and high-priced services for advertisers. Offers also sent a message to competitors: companies trying to independently defeat Facebook would not be able to get very far, says FTC. According to the claim, this further suppressed the competition.
What does FTC want?
The commission would like to restore competition, including probably by the sales of Instagram and WhatsApp. It can be catastrophic in the case of a finish, which involves instagram for a significant part of advertising revenues –About 50 percent or more in the USA. Other measures may include blocking the meta before filling in similar transactions in the future.
What is the meta defense?
The company’s main argument is that the Commission defines the market too narrowly. Meta claims that various social applications, including Tiktok and YouTube, are very competitors on Facebook. Add them to the mix, and Facebook can no longer be seen as a monopolist, says the company.
If this argument did not cause immediate victory in the finish line, its other key claim is that FTC is unable to show that consumers and advertisers are worse because of the company’s ownership on Instagram and WhatsApp – which he perceives as the requirement of the FTC case. Meta said that applications would not be as successful as today without management. “FTC must prove that consumers would have more (or better) options before without acquisitions”, company lawyers Last week he wrote in court documents. “Meta respectively claims that FTC will not be able to provide any evidence to satisfy its burden.”