The FTC Charges Meta of Squash-Mobbelling Potential Counterparts to Zuckerberg’s Dominance: A Brief Preliminary Motion

Meta is now in the midst of an antitrust trial where it’s defending itself from the FTC’s allegations that it illegally monopolized a subset of the social media market through its acquisitions of Instagram and WhatsApp, both of which the agency is seeking to unwind. The FTC charges that Zuckerberg made these purchases to squash potential rivals and further his company’s dominance. Meta writes that the case was at war with the facts and the law.

The broad strokes of these arguments have been outlined by lawyers in pretrial motions over the last 4 1/2 years, but on Monday, they were made before U.S. District Judge James Boasberg, who will be presiding over the trial in Washington, D.C., for the next eight weeks.

The supporters of the FTC’s case believe Trump could order the federal agency to settle in the middle of the trial to interfere in the case.

Zuckerberg, the chief executive of Meta, was testifying in an antitrust case brought by the FTC alleging Meta gobbled up rivals as a way to preserve its power and pad its bottom line. The case threatens to bust up the company’s $1.3 trillion business empire.

The trial is expected to involve vigorous debates about technical details. On Monday, the Federal Trade Commission gave a preview of that. Attorneys for the agency said that Meta controls 78% of a market it has defined as “personal social networks” by total monthly users.

This argument is rejected by Meta, which points out the popularity of competing services like TikTok, YouTube and X. Meta says the government has “gerrymandered” a market to exaggerate Meta’s influence. Viewed by how much time people spend on apps, Meta’s market share of social media is around 30%, the company maintains.

Google sells Chrome, Facebook sells ad revenue, and the Silicon Valley tech sector is going through a rough ride: Trump meets Zuckerberg

It is the third time in recent years the federal government has hauled a Big Tech company to court seeking to split up parts of a Silicon Valley business.

The Department of Justice wants Google to sell off its Chrome browser. A phase of that trial focused on how Google must change its business to comply with competitive law is scheduled for April. And there is a second case pending against Google in which the government alleges that the company illegally monopolizes the market for online ads.

Taken together, the legal actions against the tech companies underscore growing public and political backlash against the business practices of Silicon Valley, a skepticism that was magnified when tech critic Lina Khan headed the FTC during the Biden administration. But even Republicans, and many top Trump officials, believe the tech industry power should be reined in.

The investigation spanned more than six years across multiple administrations. The relationship between President Donald Trump and Facebook colossus Mark Zuckerman was rocky. In recent months, however, Zuckerberg has been warming up to the president. The Meta company paid $25 million to resolve a lawsuit brought by Trump about his social media accounts being taken down after the Capitol attack. And Meta has taken a number of steps to appease Trump, including ending its fact-checking program, something Trump supporters and other conservatives have long attacked as biased.

Andrew Ferguson, Trump’s pick who is now head of the agency, brushed aside rumors that the case would be dropped.

Meta’s email to executives and his case against Facebook: “It was a pleasure to do business, but what did we have to lose?”

After companies are split up, they often perform better, as was shown by an email to his executives written by him. The memo was displayed in court on Tuesday as he testified in the FTC’s case, where Meta is fighting a government lawsuit that could lead to it being broken up.

In court, FTC attorney Daniel Matheson said these messages illustrate Meta’s motivation: that it used its size and influence to crush alternative services.

“They decided that the competition was hard,” he said in his opening statement. It would be easier to buy our rivals than it is to compete with them.

He pointed out that the quality of Meta’s apps has improved on every objective measure. He said “that’s economics 101” if people use more of something when it becomes better.

“The camera was good. The filter was working well. They had good taste in their product. When he was debating building a photo service but that he was behind the times, he said that it was an experience people enjoyed. He said it was better to buy them.

On his second day on the witness stand, Mark Hansen tried to illuminate the CEO’s thoughts ahead of Meta’s 2012 purchase for $1 billion and its take-over of WhatsApp for $19 billion by pointing out to him old internal emails.

The tech executive previously testified under oath. Zuckerberg, 40, has addressed Congress more than half a dozen times, most notably on the subject of child safety, when he apologized to parents in the audience for any harm his platforms caused their children.

The judge in the case will probably decide if the rationale provided for the purchases is valid.

The threat posed to Facebook was downplayed by Zuckerberg in court. “Yeah, of course,” he said in response to Matheson asking if both apps were competing to connect friends with each other. Was that the main thing happening? Not to my recollection.”

Mark Zuckerberg and the FTC: Breaking Up the Tech Companies During Donald Trump’s Pre-Trial Interference in the FOCC Case

In a CNN interview Monday, the former FTC chair said that the president’s interference in the case was a constant worry.

Shortly after he was sworn in, the Federal Trade Commission’s lead attorney for the case, Daniel Matheson, asked Zuckerberg to reflect back on when Facebook was the underdog.

While Matheson’s line of questioning at times felt monotonous, it seemed at least partly intended to provide historical context for Chief Judge James Boasberg, who admitted during pre-trial that he’d never used a Meta service. (At one point, Boasberg asked the Meta CEO for a crash course on what “native code” meant. Zuckerberg eagerly obliged.)

To hear Meta retell it, the company saw opportunities where it could invest and grow fledgling products into now-massive apps used around the world. But the FTC argues that, like Zuckerberg’s early refusal to sell to MySpace, Instagram and WhatsApp would have been just fine on their own.

The next democratic president should take action to break up the tech companies because of calls increasing to do so, wrote Mark Zuckerberg while President Donald Trump was in office. “At that point, we will face extremely high pressure, brand damage and distraction.”