Meta Seeks Dismissal of FTC’s Antitrust Lawsuit Over Instagram, WhatsApp Deals, Claiming It ‘Faces Fierce Competition From a Range of Platforms’
Meta filed a motion Friday requesting the dismissal of the Federal Trade Commission’s antitrust lawsuit against the social media company — arguing the agency still hasn’t provided any basis for its litigation, which could potentially force Meta to divest Instagram and WhatsApp.
In December 2020, the FTC and more than 40 state attorneys general sued the company (then called Facebook), alleging it illegally acquired competitors Instagram and WhatsApp in an abuse of its monopoly power. The FTC’s original lawsuit was dismissed in June 2021, after a federal judge found the agency provided insufficient evidence that the social media giant held a monopoly. Less than two months later, the FTC filed an amended lawsuit it said established that Meta (nee Facebook) since 2011 had maintained “a dominant share of the relevant market for U.S. personal social networking services.”
More from Variety
The FTC’s suit seeks potential remedies including requiring Meta to divest or restructure its businesses, “including, but not limited to, Instagram and/or WhatsApp,” in a way that would “restore the competition that would exist” in the absence of the alleged anticompetitive conduct.
In a statement announcing Meta’s motion to dismiss, filed in the U.S. District Court for the District of Columbia, chief legal officer Jennifer Newstead said, “The evidence shows exactly what we said it would: Meta faces fierce competition from a range of platforms — from TikTok and X to YouTube and Snapchat. Further, Meta’s acquisitions of Instagram and WhatsApp, which regulators reviewed and cleared more than a decade ago, have benefited consumers. Through billions of dollars and millions of hours of investment, we’ve made the apps better, more reliable and more secure.”
Meta’s memorandum in support of the dismissal motion is available at this link. According to a supplemental statement also filed Friday, Instagram generated ad revenue of $11.3 billion in 2018, $17.9 billion in 2019, $22 billion in 2020, $32.4 billion in 2021 and $16.5 billion in the first half of 2022 — growth Meta says was made possible because of its investment in the app. The filing cites a 2017 email from Instagram co-founder Kevin Systrom, who wrote, “Our financial success was, in large part, an outcome of Facebook’s extraordinary ad ecosystem.”
Facebook in 2012 paid $1 billion to acquire Instagram, and in 2014 it inked a $19 billion deal for mobile messaging app WhatsApp. (The company changed its corporate name to Meta Platforms Inc. in October 2021.)
“The FTC reviewed both acquisitions years ago and allowed them to close,” Newstead said in the statement. “The decision to revisit done deals is tantamount to announcing that no sale will ever be final. This lawsuit not only sows doubt and uncertainty about the U.S. government’s merger review process and whether acquiring businesses can actually rely on the outcomes of the regulatory review process, but it will also make companies think twice about investing in innovation, since they may be punished if that innovation leads to success.”
Newstead’s statement continued, “Put simply, antitrust laws are supposed to promote competition and protect consumers, not punish companies for innovating to give people greater value and choice. We will continue to vigorously defend our company and the ability of people and businesses to choose the great products we offer.”
The case is one of several legal actions the U.S. government has pursued against Big Tech companies. Most recently, last month the Justice Department filed an antitrust suit against Apple, alleging the tech company has perpetuated a monopoly with the iPhone. The FTC sued Amazon on antitrust grounds last fall, and the DOJ last year filed an antitrust lawsuit against Google alleging the internet company has a “monopolistic grip” on the digital advertising market.
Best of Variety
Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
