Landmark antitrust trial could force Zuckerberg to sell Instagram

A trial in the landmark antitrust case against social media giant Meta kicked off in Washington on Monday.

Lawyers for the US competition and consumer watchdog allege Meta unlawfully quashed rivals by purchasing Instagram and WhatsApp over a decade ago.

"They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them," said Federal Trade Commission (FTC) lawyer Daniel Matheson.

Meta countered that the lawsuit from the FTC, which reviewed and approved those acquisitions, is "misguided."

Meta "acquired Instagram and WhatsApp to improve and grow them alongside Facebook," the company's attorney Mark Hansen argued.

A win by the FTC could force CEO Mark Zuckerberg break up the company.

That could include spinning off photo sharing app Instagram and messaging service WhatsApp.

The FTC says the company overpaid when it acquired Instagram for $1 billion in 2012. Two years later, it purchased the WhatsApp for $19 billion.

"The [FTC's] argument is the acquisition of Instagram was a way of neutralising this rising competitive threat to Facebook," says Rebecca Haw Allensworth, a professor of antitrust law at Vanderbilt Law School.

Ms Allensworth says Mr Zuckerberg's own words, including those from his emails, may offer the most convincing evidence at trial.

"He said it's better to buy than to compete. It's hard to get more literal than that," Ms Allensworth says.

On Monday, Matheson referenced a 2012 memo from Zuckerberg in which he discusses the importance of "neutralising" Instagram. Matheson called the message "a smoking gun."

Meta, on the other hand, said the purchases made the consumer experience better.

"Acquisitions to improve and grow" have never been found unlawful, Hansen said Monday, "and they should not be found unlawful here."

The company maintains that it faces competition from a slew of other apps, including TikTok, X, YouTube, and iMessage.

Mr Zuckerberg and the company's former chief operating officer Sheryl Sandberg are both expected to testify at the trial, which could run for several weeks.

FTC v Meta begins as another major antitrust case - USA v Google - gets set to enter what's known as the remedies phase.

The Department of Justice won the first phase of that case last summer when Judge Amit Mehta found that Google holds a monopoly in online search, with a market share of around 90%.

Last month, the DOJ reiterated a demand made during the Biden administration that a court break up Google's search monopoly.

The FTC's case against Meta will be tougher to prove, says Laura Phillips-Sawyer, an associate professor of business law at the University of Georgia.

"I think they have a real uphill battle," Ms Phillips-Sawyer said of the FTC.

"They have a long road before any consideration of divestiture of Instagram or WhatsApp is considered."

That's because compared to online search, there's more competition in the personal network services space that Meta operates in, Ms Phillips-Sawyer said.

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