what you need to know
- The U.S. Federal Trade Commission filed a lawsuit in 2020 that, if successful, would force social media giant Meta to sell Instagram and WhatsApp.
- Meta filed a motion for summary judgment on Friday and is seeking dismissal, claiming the FTC has yet to provide evidence for its claims.
- A judge dismissed the original lawsuit in 2020, but the FTC filed an amended complaint in 2021. Now, Meta wants the new complaint dismissed on the same grounds.
Meta is asking the Federal Trade Commission (FTC) to dismiss the U.S. antitrust lawsuit due to a lack of evidence, according to a motion for summary judgment filed on Friday, April 5. The case centers on whether Meta exercises monopoly power in the social media industry through its ownership of Facebook, Instagram and WhatsApp. If successful, Meta would be forced to divest (in other words, sell) WhatsApp and Instagram, effectively reversing the acquisition.
The original complaint was filed by the FTC in 2020 but was dismissed due to insufficient evidence. An amended complaint was filed in 2021, and so far the legal battle has begun. Meta is now again asking for the case to be dismissed on the same grounds, hoping to avoid a trial.
The company explained its reasons for the motion to dismiss in a blog post. “We have asked the court to dismiss this case because the FTC has failed to provide evidence to support its claims,” said Jennifer Newstead, Meta’s chief legal officer. “Instead, the evidence shows that we face significant competition from a range of platforms, and that we have limited control over Instagram.” and WhatsApp acquisition benefiting consumers.”
Attorneys general from 48 U.S. states also joined the FTC in claiming that the acquisitions of Instagram in 2012 and WhatsApp in 2014 were anti-competitive practices. The agency approved both acquisitions before they were completed and is now trying to reverse the decision.
“The decision to revisit a completed deal is tantamount to announcing that no deal will be final,” Newsted added. The lawsuit, he continued, “will also make companies think twice about investing in innovation because if Do and they may be punished”. Innovation brings success. “
The official complaint raises questions about the FTC’s antitrust rights in a market described as “personal social networking services” (PSNS). The FTC claims this market exists, but it only includes four apps: Facebook, Instagram, Snapchat, and MeWe. Meta countered that notion, saying consumers would turn to services like TikTok, YouTube, X (formerly Twitter) and LinkedIn for many of the same services Meta apps offer.
Meta also rejects claims that it has monopoly power, in part because it believes the Federal Trade Commission’s antitrust markets are ineffective. Furthermore, it argued that the company could not be considered a monopoly because it “never set prices and never limited output.”
“From the outset, the FTC failed to make a reasonable claim, and the agency took no steps to demonstrate otherwise through the discovery process,” Newstead said.
Now, the FTC can shed some light on why the lawsuit should proceed. After deliberations, the court can rule in Mehta’s favor and dismiss the complaint, or proceed with trial.