Did your new venture introduce a new feature that people like? Before you say ‘Series B’, Meta will have developed something similar, integrated it into multiple platforms, and acquired your profit. This is not the way CEO Mark Zuckerberg would like to see his kingdom grow. Instead, it is an asset; some businesses have done a good job of detecting and capitalising on trends.
Sometimes, capitalising on trends requires billions of dollars to acquire Instagram and WhatsApp, and sometimes, you will end up in an antitrust or Meta monopoly trial against the FTC.
Meta Monopoly Trial Finals
Over the past many weeks following the Meta monopoly trial, executives and experts have questioned in a DC courtroom whether Meta bought those entities and assisted them in achieving greatness. They were also investigated to determine whether they purchased the entities to prevent them from doing so. The final consideration of James Boasberg will have a significant consequence for the entire industry.
The Meta Platforms vs. Federal Trade Commission, or Meta monopoly trial, came to an end after six weeks of testimony from 38 witnesses at the US District Court for the District of Columbia. It involved Mark Zuckerberg, the chief executive of Meta, who was grilled by government advocates accusing him of acquiring Instagram and WhatsApp in a ‘buy or bury’ strategy to build a social networking monopoly for the company.
Meta explained itself by saying it experiences ample competition from rivals like TikTok and YouTube, which benefits nascent applications with generous resources. Following the Meta Monopoly Trial, both parties have the scope to file follow-up briefings this summer. Judge Boasberg, who is presiding over the trial, opined that he would work ‘expeditiously’ to issue an opinion on whether Meta violated the law. However, he will probably not hold closing arguments.
Judge Boasberg will consider the accusation of the government that Meta, formerly known as Facebook, paid highly to acquire Instagram and Whatsapp with an estimated value of $1 billion for Instagram and $19 billion for WhatsApp to eliminate the companies from competition. During the Meta monopoly trial, the government claimed that Meta breached the law of Section 2 of the 135-year-old Sherman Antitrust Act. This federal law rules out the monopolisation of an industry through anticompetitive actions.
Expected Impact of Judge’s Decision
The judge’s decision in the Meta monopoly trial has the potential to fine-tune Meta’s strong social networking business, which has assisted it in determining the social media landscape. Mark Zuckerberg co-founded Facebook in his Harvard dorm room in 2004. The Federal Trade Commission has requested that the jury force Meta to walk off from Instagram and WhatsApp. If accepted, the request could significantly squeeze the power dynamics in Silicon Valley.
The main attraction of this Meta monopoly trial case was a treasure of over 100 internal documents in which Mark Zuckerberg and other executives explained their anxiety over competition from WhatsApp and Instagram and their logic for acquiring them.
Judge Boasberg has asked to answer the main question of how to explain social media networking, which has evolved rapidly over the last decade since channels have expanded into entertainment, gaming, and commerce.
The FTC has attempted to explain the market in a narrowed way, depicting that Meta rivals only with other applications that connect friends and family, like Snapchat. During the Meta monopoly trial, Meta claims that users mainly visit Facebook and Instagram to scroll content in the form of short videos for entertainment, which makes the other two, TikTok and YouTube, potential competitors.
Perceptions of Experts and Professionals
A senior FTC official opined that ‘the case shows a crucial legal principle that an organisation which is a monopolist cannot acquire the most threatening competitors’ in a press case a week ago. He added ‘Antitrust law needs competition on the gains, even in the digital markets, and the competition on the gains that drives innovation and eventually assists customers.
During a conversation on the Meta monopoly trial, a Meta spokesman stated that ‘the only thing which the FTC presented was the dynamic, hypercompetitive nature of the past, present, and future of the tech field’. Hence, the judge’s judgment is expected to affect the business landscape significantly. If the judgment favors the FTC, it will send a message to businesses scrutinising them over acquiring startups.
As Jennifer Huddleston, a senior executive at Cato Institute, opined, this could have a great impact on the leading players looking to acquire new talent or businesses. Legal experts stated that the Meta monopoly trial will be challenging to win since it requires unsealing mergers from several years ago that the authorities already approved. Meta invited eight witnesses over four days to combat the government’s allegations.
Sruthi Thatchenkery, an assistant professor, has stated on the Meta monopoly trial that ‘Meta should be confident in its arguments’ and that ‘it is difficult to unmask a merger. The case, filed five years ago, is associated with the ongoing effort by government officials to dominate technology firms. The Department of Justice has already taken over two antitrust cases against Google and Apple on the claims that they unlawfully cut competition in their app stores. Additionally, the FTC is suing Amazon for its competition game by offering its own products and services with priority over those of third-party sellers associated with the platform.
Allensworth, a law professor and antitrust professional, stated on the Meta monopoly trial that the FTC has done a good job of reducing the weaknesses. She also added that Facebook has something that the other social media platforms lack: direct linking to friends and family, which makes it a different type of product and not an alternative to the competitors. This was prominent when Meta experienced an increase in the use of holidays.
During the Meta monopoly trial, Meta advocates have argued that Facebook’s offerings have changed since its inception and its acquisition of Instagram and WhatsApp to include products that exceed the list of rival companies. Although the FTC calls Snapchat a rival, it does not consider TikTok and YouTube competitors.
Justin Teresi, another antitrust expert associated with Bloomberg Intelligence, finds this change works for Meta by naturally fine-tuning the competitive landscape. However, several representatives from tech businesses like Reddit X, TikTok, and Pinterest have spoken up during the Meta monopoly trial to explain how their channels compete with Meta.
Teresi also added that it is still not clear which way the Judge is leaning. Teresi predicts that Meta has a 60% chance of winning the Meta monopoly trial, and there is always a chance for a settlement for both parties. All the antitrust cases are challenging to beat. Hence, it is unpredictable to take one side as the Meta monopoly trial may go either way.
Final Thoughts
The most awaited Meta monopoly trial finally came to an end after several weeks of investigation. DC District Court Judge Boasberg is presiding over the case of whether Facebook is trying to monopolise the market and cut competition. The case was first brought to light in 2020. This phase of the Meta monopoly trial will assist the judge in making a decision on whether Meta is accused of breaching antitrust law. Stay tuned with us to receive more updates on this news.
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