Over the course of a six-week trial before Judge Boasberg in the District Court for the District of Columbia—which concluded yesterday—the Federal Trade Commission (FTC) and Meta each made their respective cases about whether the acquisitions of the photo-sharing app Instagram and messaging service WhatsApp maintained Meta’s alleged monopoly in the FTC’s purported “personal social network services” (PSNS) market. Facing numerous legal and factual hurdles, the FTC has likely failed to meet the burdens required to prove that Meta violated the Sherman Act, the first step toward breaking up the company.

Sticking Points

Provided below are six key sticking points in the FTC’s case.

#1: Market Definition

The FTC’s narrow PSNS market—comprised only of Meta, Instagram, Snapchat, and MeWe—was a hotly contested issue at trial. The FTC focused primarily on demonstrating that friends and family sharing was “core” to these four applications, whereas other social media platforms were based on different types of sharing. However, at bottom, the FTC’s case incorrectly framed as a distinction in kind a difference that was only a matter of degree: As ITIF previously discussed, non-friends and family sharing occurs on platforms in the PSNS market, just as friends and family sharing occurs on platforms outside the PSNS market. And the evidence was overwhelming at trial that consumers substitute time on Facebook and Instagram with video platforms like TikTok and YouTube, which, in turn, offer users many of the same features available on Meta’s platforms.

#2: Monopoly Power

This inability to isolate friends-and-family sharing also undermines the FTC’s claim that Meta has monopoly power in the PSNS market. As Judge Boasberg made clear on summary judgment, “[s]ignificant unresolved questions remain over the ultimate viability of the agency’s apparent position that all time spent on PSN applications relates to PSN services (even passive consumption of a video or buying a table from a stranger), while none of the time spent on applications like YouTube, TikTok, Or X does so (even sharing a TikTok with a friend in-app).” While Boasberg warned that “more precision will be expected at the main event,” the FTC simply does not appear to have risen to the occasion by providing updated market-share calculations. While claims of monopoly-style discrimination were put forward as an alternative, as Meta explained in a motion seeking judgment in its favor after the FTC rested its case, “Meta does not show more ads to those engaged in friends-and-family sharing.”

#3: Barriers to Entry

The FTC also attempted to show that Facebook benefited from barriers to entry that protected any social media monopoly position it held: The ability of platforms to replicate each other’s services and limit product differentiation, buttressed by network effects across Facebook’s platform, resulted in a world of high costs and little value for consumers seeking to switch. Unfortunately, this argument cuts both ways for the FTC. First, if supply substitution is so easy, how can Facebook and Instagram be so easily distinguished from other platforms on the grounds that they are geared toward friends and family sharing—a form of engagement that, as Meta described at trial, has itself become a small and declining part of the activity on its platforms? And if network barriers to entry are so high that not even alternatives like Google+ could compete with Facebook, how likely was it that Instagram and WhatsApp would have developed into significant threats?

#4: Direct Evidence

Not only did the FTC have difficulty proving that Meta had monopoly power in a relevant market protected by barriers to entry, but the direct evidence surrounding the question of whether Meta had monopoly power—prices, output, innovation, and product quality—was strongly in the company’s favor. For example, Meta made WhatsApp free, and output for Instagram has exploded from less than nine million to 230 million U.S. monthly active users under its watch. Indeed, Facebook also remained free to consumers despite Meta’s addition of numerous new features, such as Feed and Stories, among others. While the FTC tried to counter this by providing evidence of consumer harm using less rigorous measures like product quality in the form of increased ad load and supposedly poor consumer privacy practices, the totality of the evidence strongly suggests that on Meta’s platforms, quality-adjusted prices have been falling, as well as output and innovation increasing.

#5: Instagram

The FTC’s strongest theory of harm has always been that the Instagram acquisition was anticompetitive. Highlighting internal documents from top Meta executives, including Mark Zuckerberg, the FTC presented evidence that Instagram was leveraging the rise of mobile and “trying to build a parallel network” to Facebook in a way that made the company “threatening.” However, the central problem for the FTC was still unresolved by the trial’s end: causation. Specifically, in view of the tremendous growth of Instagram following its acquisition, could the FTC demonstrate that competition and consumers would have been better off if the transaction had not occurred? Indeed, as Meta explained, much of this growth was a result of Instagram being able to benefit from the distribution and resources Meta provided—including headcount. As such, and as the FTC’s own expert admitted, in the end, we just don’t know what Instagram would have looked like in the agency’s alternative reality: “It might have been smaller. It might have been bigger.…And I think in the but-for world, how this all would have played out, we don’t know.” That’s just not good enough for the FTC to win on this claim.

#6: WhatsApp

Overall, the FTC’s attempt to demonstrate that the WhatsApp acquisition maintained a Meta monopoly did not go well. The agency’s battle plan was essentially to demonstrate that WhatsApp was a nascent competitor that was reasonably capable of impeding Meta’s monopoly, principally by highlighting several documents by Meta executives that noted their concerns about WhatsApp becoming a social media rival. However, while the intent to eliminate an actual potential rival could evince that the transaction was reasonably capable of eliminating a competitor, the additional evidence that the deal was reasonably capable of harming competition proved elusive: As other testimony made clear, WhatsApp—which, again, Meta made free—never really had the incentive or ability to expand into a friends and family social media service in a way that could have challenged Facebook any more than iMessage or the myriad other messaging services that have not transformed into social players.

Conclusion

FTC v. Meta represents a prime example of the bipartisan nature of the new anti-tech antitrust populism: a case first filed by the first Trump administration, refiled by the Biden administration, and now being litigated by the second Trump administration. It may thus prove to be a major defeat for the overall movement. As the trial put on full display, whether it was proving that Meta had monopoly power or that its acquisitions of Instagram and WhatsApp were anticompetitive, the FTC simply was not up to the task. Although the ultimate ruling by Judge Boasberg remains uncertain, reading the tea leaves suggests yet another defeat for the FTC when challenging Meta’s acquisitions. To be sure, while conservatives' concerns with the company in areas like censorship will continue, when it comes to the chances of prevailing on the discrete antitrust questions at issue in this litigation and the desire to break up the company, the FTC’s best days are almost surely behind it.