Meta is not a monopoly, judge rules

Meta won a landmark antitrust battle with the Federal Trade Commission on Tuesday after a federal judge ruled that it did not have a monopoly on the social media market at the heart of the case.

U.S. District Judge James Boasberg books That Meta did not unfairly corner the market for “personal social networking,” a category that includes a narrow subset of social media apps including Facebook, Instagram, and Snapchat. The decision, which can be appealed by the Federal Trade Commission, means Meta will not immediately face demands to back away from its Instagram and WhatsApp acquisitions.

Boasberg noted that he warned the FTC that it faces an “uphill battle” in identifying the market at issue and proving Meta’s illegal monopoly on it. Ultimately, he said it failed to prove that Meta did not face significant competition from other types of social media platforms, especially after the meteoric rise of TikTok — which Meta cited as a key factor in its defense. “The landscape that existed just five years ago when the FTC filed this antitrust case has changed significantly,” Boasberg wrote. “While it may have previously made sense to segment apps into separate social networking and social media markets, that wall has since come down.”

The FTC said Meta maintained illegal monopoly power in a narrow sector of the social media market by gobbling up emerging rivals, Instagram and WhatsApp, which it feared would threaten its dominance. But throughout the trial, the FTC faced questions about whether it could claim that Meta still had this illegal monopoly in the face of a dramatically changing social media landscape. Boasberg said the government must prove current or impending illegal monopoly, not just past dominance.

“As apps rose and ebbed, chasing one craze and moving on from others, and adding new features with each passing year, the FTC has understandably struggled to reform the boundaries of the market for meta products,” Boasberg wrote. “Yet it still maintains that Meta is competing with the same legacy competitors it has had for the past decade, that the company has a monopoly over this small group, and that it has maintained that monopoly through anticompetitive acquisitions. Whether or not Meta had monopoly power in the past, the agency must prove that it still retains that power now. Today’s court ruling holds that the FTC does not.”

Although the FTC tried during the trial to prove that social media users come to Meta apps for different use cases of connecting with friends compared to streaming-focused video and streaming apps like YouTube or TikTok, Boasberg seemed unconvinced. “Meta apps are reasonably interchangeable with TikTok and YouTube,” he wrote. One compelling piece of evidence was how users flocked to Meta apps during TikTok’s brief blackout in the US over the short-lived ban. The way users are replacing Meta apps with TikTok apps showed that the FTC’s “thesis about how people use these apps is consistently refuted by data,” Boasberg said.

However, Boasberg acknowledged that YouTube’s inclusion in the personal social networking market is “more controversial” than TikTok’s. This shows how much of a role the timing in the case may have played in the outcome — now, Boasberg wrote, Meta would still have no monopoly power with TikTok in the picture, even if he believed YouTube was not a suitable alternative.

Boasberg had plenty of opportunities to prevent the case from going to trial, including when he initially dismissed the FTC’s case, but gave it a chance to refile. He wrote that each time he re-examined meta-applications throughout the years of litigation, both meta-applications and their competitors changed. “The court’s two opinions on motions to dismiss don’t even mention the word ‘TikTok,’” Boasberg wrote. “Today, that app takes center stage as Meta’s fiercest competitor.”

“Today’s court decision recognizes that Meta faces fierce competition,” Meta spokesman Chris Sgro said in a statement. “Our products benefit individuals and businesses and embody American innovation and economic growth. We look forward to continuing to partner with and invest in America.” The Federal Trade Commission did not immediately respond to a request for comment.

The ruling marks the FTC’s second major antitrust loss against Meta. During the Biden administration, the court allowed Meta It has completed its acquisition of virtual reality fitness company Inside Although the FTC and the agency were eventually challenged I decided not to appeal. The FTC’s antitrust case against Meta was first filed during the first Trump administration, and the amended complaint was filed during the Biden administration. The case went to trial earlier this year during Trump’s second administration.

The government now has a mixed record on modern technology monopoly issues. The Justice Department won two antitrust cases against Google’s search and ad technology companies, though the judge failed to provide most of the remedies he wanted in the search case. Closing arguments in the remedies phase of the ad technology case are scheduled for later this week.