Meta Isn’t a Monopoly, U.S. Court Rules. It Gets to Keep Instagram and WhatsApp.

Mark Zuckerberg, Meta founder and CEO. (JOSH EDELSON/AFP/ Getty Images)

Key Points

• A U.S. District Court judge ruled that Meta Platforms is not a monopoly and its acquisitions of Instagram and WhatsApp don’t violate antitrust laws.
• The Federal Trade Commission sued Meta in 2020, alleging a strategy to acquire or outcompete new social networks, a claim the judge rejected due to market changes.
• The court determined that the social media market has evolved significantly, making the FTC’s narrow definition of “personal social networks” outdated.

A U.S. District Court judge ruled on Tuesday that Meta Platforms isn’t a monopoly and that its 2010s acquisitions of Instagram and WhatsApp don’t violate antitrust laws. Meta was at risk of being forced to divest these apps had the case gone the other way.

In later afternoon, Meta stock was off its lows for the day, but still down 0.3% at $600.39. The S&P 500, for comparison, was down the same amount.

The Federal Trade Commission sued Meta in 2020 toward the end of the first Trump administration, claiming that Meta had pursued a policy of giving new social networks a choice of being bought out or having to compete with Facebook directly and risk going under. During the trial, the FTC provided evidence that this strategy was pushed by CEO Mark Zuckerberg, who feared disruption.

The judge sided with Meta because much has changed, even in just the five years since the government first filed the case. “While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down,” said Judge James Boasberg in his decision.

At issue was the definition of the market that Meta was allegedly monopolizing. The FTC wanted a narrow definition of “personal social networks” that excluded important Meta competitors like YouTube and TikTok. In Judge Boasberg’s view, even if that was an accurate picture when the trial began, it no longer is.

“The rapids of social media rush along so fast that the Court has never even stepped into the same case twice. It considered motions to dismiss in 2021 and 2022, motions for summary judgment in 2024, and a full merits trial this year,” Boasberg wrote in his conclusion. “Each time it examined Meta’s apps, they had changed. The competitors had, too.”

“The Court’s decision today recognizes that Meta faces fierce competition,” said Meta’s Chief Legal Officer Jennifer Newstead in an emailed statement. “Our products are beneficial for people and businesses and exemplify American innovation and economic growth.”

The Trump FTC did’nt mince words, taking a shot at Judge Boasberg. “We are deeply disappointed in this decision,” said FTC Director of Public Affairs, Joe Simonson. “The deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment. We are reviewing all our options.”

This is the second antitrust ruling this year that favored a Big Tech defendant because the landscape had shifted while the trial progressed. Though Alphabet lost the liability phase of United States v. Google, Judge Amit Mehta ultimately used a light touch in his penalties because, in the interim, artificial-intelligence search engines had come to challenge Google’s search monopoly for the first time in many years.

Write to Adam Levine at adam.levine@barrons.com