Meta Faces An Antitrust Lawsuit, FTC Says Company Holds A 'Social Network Monopoly'

Benzinga
04-19
  • On Monday, Meta and the FTC began a faceoff in court over monopoly claims
  • If the FTC wins, Meta will be forced to sell off apps like Instagram and WhatsApp
  • Meta CEO Mark Zuckerberg's relationship with President Donald Trump has been called into question, as many worry that it could potentially sway the outcome of the trial

The US government began a closely watched aantitrust case against Meta (NASDAQ:META) on Monday. The Federal Trade Commission's suit alleges that the company has illegally built a "social networking monopoly" through years of "anticompetitive conduct." Defending his company's actions, Meta CEO Mark Zuckerberg took the stand on the first day of proceedings, answering questions about the company's intentions in purchasing apps like Instagram and WhatsApp, and his oft-repeated philosophy "it's better to buy than compete," according to the Associated Press. 

If the government wins the case, Meta will be forced to sell off Instagram and WhatsApp, and other tech giants, like Alphabet (NASDAQ:GOOGL, GOOG)) and Amazon (NASDAQ:AMZN), would be put on notice.

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Historically, the FTC has operated with a large degree of independence, meaning its investigators have been shielded from political pressure. But over the course of his second term, President Donald Trump seems to be bucking those norms. This could have a significant impact on the outcome of the case.

In January, The New York Times reported that Zuckerberg told employees, "We now have an opportunity to have a productive partnership with the United States government," and "we're going to take that." His comments came after months of private dinners with Trump and those his camp, trips to Mar-a-Lago, and policy changes on his platforms that benefited Trump. The Times reported earlier this month that Zuckerberg visited the White House to urge Trump to intervene in the case.

At the time, a Meta spokesman Andy Stone, told the Times that the company "regularly meets with policymakers to discuss issues impacting competitiveness, national security, and economic growth," essentially implying that the visit wasn't out of the norm. But still, the meeting has raised concerns that Zuckerberg and Meta have been unfairly attempting to sway the outcome in their favor.

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But the question remains, will it work? Maybe, maybe not.

The biggest hurdle will be the U.S. district judge assigned to the case, Judge James Boasberg. Described by Trump as a "Radical Left Lunatic," Boasberg has a nonpartisan record and a sterling reputation in legal circles. However, he has rejected Meta's bids to dismiss the suit once, and seems to be unswayed by Trump so far, ruling against the president's use of the Alien Enemies Act to deport alleged gang members, although he was largely overruled by the Supreme Court.

But Meta isn't giving up. Ahead of the trial, a company spokesman told CNN, "Regulators should be supporting American innovation, rather than seeking to break up a great American company and further advantaging China on critical issues like AI." And Meta reportedly plans to argue at trial that it remaining so large and expansive is critical, as it provides an American answer and competitor to foreign-owned platforms like TikTok and domestic competitors like YouTube and X, per CNN. 

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This article Meta Faces An Antitrust Lawsuit, FTC Says Company Holds A 'Social Network Monopoly' originally appeared on Benzinga.com

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