FTC Antitrust Battle Vs Meta Could Force Sale Of Instagram And WhatsApp

Meta is facing an antitrust lawsuit from the US Federal Trade Commission(FTC) that could force it to sell WhatsApp and Instagram over accusations of monopoly. The case commenced during President Trump's first term in 2020 when antitrust regulators sued Meta, accusing it of stifling competition through its purchase of WhatsApp and Instagram.

While the FTC gave regulatory nods to Meta for both acquisitions, it now seeks to establish that Meta's acquisition of WhatsApp and Instagram was an illegal strategy to evade competition.

Reacting to this in a blog post, Meta's chief legal officer Jennifer Newstead described the case as weak and that it would deter tech investment. She argued that "It's absurd that the FTC is trying to break up a great American company at the same time the Administration is trying to save Chinese-owned TikTok.”

It's hard to argue with Newstead's logic here, actually. Regardless, this trial is significant, considering that if Meta is found guilty it may potentially cause the company to sell WhatsApp and Instagram which are key components of its revenue stream.

The trial is likely to involve Meta CEO Mark Zuckerberg, who will testify regarding emails he authored in which he expressed concerns about WhatsApp's potential to become a social media network and a proposal to buy Instagram to stave off competition for Facebook.

Court filings reveal that Meta will contend that statements attributed to Zuckerberg are immaterial considering that Meta's investments on these platforms have benefitted users and that the issue of monopoly does not arise since Meta faces competition from a host of platforms such as TikTok, YouTube, Snap, and iMessage.

Zuckerberg has long courted President Trump in a bid to resolve the issues around Meta. We reported in January that Meta opted for a settlement in a lawsuit Trump brought against Meta for censoring his posts on Meta's social media platforms in 2021. The New York Times also reports that Zuckerberg has long been looking for political solutions to the antitrust lawsuit and has made a series of visits to the White House as a result.

Meta’s Instagram has been gradually adding features and positioning itself as a platform that will likely replace TikTok in the US if negotiations to acquire it fails. Hence, Meta’s divestment from WhatsApp and Instagram may not be the most ideal decision. While it appears to be a fierce legal battle with lawyers ready on both sides, both parties will likely explore settlement in the suit.