A PYMNTS Company

Meta Challenges FTC’s Antitrust Lawsuit, Citing Lack of Evidence

By  |  April 7, 2024
Meta has petitioned a federal court to dismiss the Federal Trade Commission’s antitrust lawsuit, contending that the FTC lacks evidence to substantiate its claims. In a motion for summary judgment submitted on Friday, Meta asserts that the lawsuit should be dismissed because it doubts the FTC’s ability to demonstrate the relevant market or prove that its acquisitions of Instagram and WhatsApp were detrimental to consumers.

The lawsuit, initiated in December 2020 by the FTC and over 40 state attorneys general, accused Meta of unlawfully acquiring its competitors Instagram and WhatsApp, allegedly abusing its monopoly power. However, Meta contests that the FTC has yet to furnish a solid foundation for its litigation, which could potentially compel the company to divest itself of these platforms.

This legal saga began with the dismissal of the FTC’s original lawsuit in June 2021. At that time, a federal judge ruled that the agency failed to provide sufficient evidence to support the claim that Meta held a monopoly. Undeterred, the FTC filed an amended lawsuit less than two months later, asserting that Meta, formerly Facebook, had maintained dominance in the U.S. personal social networking services market since 2011.

In response to Meta’s motion to dismiss, Jennifer Newstead, Meta’s chief legal officer, emphasized the intense competition within the social media landscape. She stated, “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.”

Related: Meta Defends Itself Against EU’s Accusations Of Misuse Of Dominance

Newstead further defended Meta’s acquisitions of Instagram and WhatsApp, emphasizing their benefits to consumers. “Through billions of dollars and millions of hours of investment, we’ve made the apps better, more reliable and more secure,” she asserted.

According to supplementary documents filed by Meta, Instagram’s advertising revenue saw significant growth following its acquisition. Figures revealed indicate revenues 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. Meta attributed this growth to its investments in the platform.

Highlighting the regulatory history of the acquisitions, Newstead pointed out that both Instagram and WhatsApp were cleared by regulators years ago. She criticized the FTC’s decision to revisit these deals, suggesting it undermines the integrity of the merger review process and could discourage companies from investing in innovation.

“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.”

Source: About FB