Report from Bloomberg
In Brief – The US Federal Trade Commission announced that it notified the Federal Court of Appeals for the District of Columbia that it will appeal a federal judge’s ruling that Meta does not hold an illegal monopoly in social networking. In the antitrust case that was initiated in 2020 and wrapped up last fall, the FTC has argued that Meta violated federal antitrust law when they acquired Instagram in 2012 and WhatsApp in 2014, were an illegal monopolist in the market for “personal social networking” in the years since, and that the acquisitions should be unwound. However, District Judge James Boasberg concluded that the regulator failed to show that Meta’s currently maintained a monopoly because they face such significant competition from social media giants including YouTube and TikTok. The FTC argues that the district court applied the wrong legal lens by focusing on current market conditions rather than the competitive landscape for the decade following the acquisitions, during which time the regulator claims the company held its monopoly and undermined competition. Meta responded saying the ruling correctly recognized the intense competition it faces and reiterated its commitment to innovation and investment.
Context – Judge Boasberg always saw the government’s market definition as their Achilles Heel. He dismissed the original complaint in 2021, and while he eventually allowed the amended complaint to proceed, he continued to express skepticism with the FTC’s argument that Meta was the dominant “personal social networking” company whose top competitor was Snapchat, ignoring TikTok. This loss was the second major antitrust decision last year where a federal judge rejected the government’s effort to break up a tech giant because of big changes in the digital marketplace, with Judge Amit Mehta crafting remedies in the Google Search case that he said were based on “a healthy dose of humility” in light of the rapid rise in AI chatbots and their convergence with search. The FTC’s appeal does illustrate that the anti-Broligarch wing of MAGA is alive and kicking.