The tech behemoth Meta is set to undergo a legal battle in Washington due to accusations of consolidating control over social networking sites through acquisitions like those of Instagram and WhatsApp. This litigation might persist for several years.
A antitrust trial against U.S. social media corporation Meta commenced in a Washington federal court on Monday. The lawsuit alleges that the firm acquired platforms like Instagram and WhatsApp with the illegal intent to stifle competition.
The US Federal Trade Commission (FTC) is seeking for Meta, the company behind Facebook, to undo the acquisitions that took place over ten years ago.
Nonetheless, considering potential appeals from either side, the trial could prolong itself for many years.
What was Meta’s response in the courtroom?
During their initial arguments, FTC lawyer Daniel Matheson stated that Meta has seen significant financial gains despite declining user contentment. Additionally, he mentioned that Meta was “building a moat” to safeguard its position by acquiring companies like Instagram and WhatsApp due to concerns about these platforms posing a risk to the company’s dominant standing in the social media sector.
Matheson stated, ‘We will provide them with an opportunity to share their version of events.’
The CEO of Meta, Mark Zuckerberg, dedicated much of his Monday afternoon to being questioned in court by Matheson.
Mark Hansen, the lawyer representing the company, stated that the FTC was presenting a mix of inaccurate claims. Hansen pointed out that Meta faces significant competition and has enhanced the performance of both Instagram and WhatsApp following their acquisition as startup companies.
In brief, this legal action is misdirected,” stated Hansen, further noting: “no matter how you examine it, consumers have emerged as the major beneficiaries.
What are the allegations?
The legal action was initiated against Meta—previously known as Facebook—in 2020, when Donald Trump was serving his first presidential term.
The U.S. government, via the Federal Trade Commission’s antitrust division, has accused the company of abusing its dominant position in the market to buy out potential rivals, specifically Instagram and WhatsApp, before they could compete directly with them.
In 2012, Meta acquired Instagram for approximately $1 billion (€880 million), and in 2014, they purchased WhatsApp for roughly $22 billion.
At the time, the FTC sanctioned the acquisitions.
Zuckerberg’s relation with Trump
Zuckerberg anticipated that President Donald Trump might have the case dismissed since Trump’s predominantly business-oriented approach has generally shown support for major technology companies.
Before the trial began, Zuckerberg aimed to employ alternative methods to encourage Trump to opt for a settlement instead of pursuing litigation, amongst other strategies.
donating to the president’s inaugural fund
and
relaxing regulations regarding content oversight
.
In January, Meta also agreed to pay Trump $25 million.
To resolve a lawsuit from 2021 where he claimed wrongful suspension of his accounts by Facebook and Instagram following the US Capitol riots.
The trial is under the supervision of Judge James Boasberg, who is also handling the prominent case related to federal government directives.
deport Venezuelans utilizing a wartime statute.
In 2021, he determined that the lawsuit against Meta was “legally inadequate.”
However, the FTC has succeeded in getting its case heard in court this time.
What is Meta’s anticipated strategy for defending itself?
Meta has dismissed these allegations and contended that platforms like TikTok, operated by the Chinese firm ByteDance, offer sufficient rivalry within the marketplace.
The legal representatives of Meta are anticipated to argue during the trial that it was significant financial commitments from the corporation that transformed these two acquisitions into major profit generators. For instance, Instagram was merely a modest photo-sharing application at the time of acquisition.
They will emphasize as well that Meta’s applications are accessible at no cost to users.
The globe’s third wealthiest individual, Zuckerberg, has purchased a multimillion-dollar estate in Washington D.C., a choice interpreted as his effort to remain near the heart of political governance.
Edited by: Alex Berry
Author: John Silk (along with AP, Reuters)