Meta is not a monopolist, judge rules

Meta won a landmark antitrust battle with the Federal Trade Commission on Tuesday after a federal judge ruled it has not monopolized the social media market at the center of the case.

US District Court Judge James Boasberg wrote that Meta had not unfairly cornered a market on “personal social networking,” a category that includes a narrow subset of social media apps including Facebook, Instagram, and Snapchat. The decision, which can be appealed by the FTC, means Meta will not immediately face demands to undo acquisitions of Instagram and WhatsApp.

Boasberg noted that he’d warned the FTC that it faced an “uphill battle” in defining the market at issue and proving Meta held an illegal monopoly in it. Ultimately, he ruled, it failed to prove that Meta didn’t face substantial competition from other kinds of social media platforms, particularly after the rapid rise of TikTok — which Meta cited as a major factor in its defense. “The landscape that existed only five years ago when the Federal Trade Commission brought this antitrust suit has changed markedly,” Boasberg wrote. “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.”

The FTC argued that Meta had maintained illegal monopoly power in the narrow sector of the social media market by gobbling up nascent competitors, Instagram and WhatsApp, it feared could threaten its dominance. But throughout the trial, the FTC was dogged by questions about whether it could claim Meta still had that illegal monopoly in the face of a greatly changed social media landscape. Boasberg said the government had to prove current or imminent illegal monopolization, not just past dominance.

“With apps surging and receding, chasing one craze and moving on from others, and adding new features with each passing year, the FTC has understandably struggled to fix the boundaries of Meta’s product market,” Boasberg wrote. “Even so, it continues to insist that Meta competes with the same old rivals it has for the last decade, that the company holds a monopoly among that small set, and that it maintained that monopoly through anticompetitive acquisitions. Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The Court’s verdict today determines that the FTC has not done so.”

Though the FTC tried to prove throughout trial that social media users come to Meta’s apps for different use cases of connecting with friends than they do video and broadcast-focused apps like YouTube or TikTok, Boasberg seemed unconvinced. “Meta’s apps are reasonably interchangeable with TikTok and YouTube,” he wrote. One compelling piece of evidence was how users flocked to Meta’s apps during TikTok’s brief blackout in the US around its short-lived ban. Boasberg said the way users would substitute Meta’s apps for TikTok showed that “the FTC’s hypothesis about how people use these apps is consistently disproven by the data.”

Still, Boasberg conceded that YouTube’s inclusion in the personal social networking market is “more debatable” than TikTok’s. That goes to show how much of a role the timing in the case might have played in the outcome — now, Boasberg wrote, Meta would still not hold monopoly power with TikTok in the picture, even if he believed YouTube was not an appropriate substitute.

Boasberg had plenty of opportunities to block the case from going to trial, including when he initially threw out the FTC’s case, but gave it a chance to refile. Every time he has reexamined Meta’s apps throughout the years of litigation, he wrote, both Meta’s apps and its competitors had changed. “The Court’s two Opinions on motions to dismiss did not even mention the word ‘TikTok,’” Boasberg wrote. “Today, that app holds center stage as Meta’s fiercest rival.”

“The Court’s decision today recognizes that Meta faces fierce competition,” Meta spokesperson Jennifer Newstead said in a statement. “Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the Administration and to invest in America.” FTC spokesperson Joe Simonson said the agency was “deeply disappointed” in the ruling. “The deck was always stacked against us with Judge Boasberg, who is currently facing articles of impeachment. We are reviewing all our options.” GOP lawmakers have filed articles of impeachment over Boasberg’s separate rulings about the Trump administration’s invocation of the Alien Enemies Act, and Special Counsel Jack Smith’s investigation into the 2020 election.

The ruling represents a second significant antitrust loss for the FTC against Meta. During the Biden administration, a court let Meta complete its acquisition of virtual reality fitness startup Within despite an FTC challenge, and the agency ultimately decided not to appeal. The FTC’s monopolization case against Meta was first filed during the first Trump administration, and the amended complaint was filed during the Biden administration. The case went to trial earlier this year during the second Trump administration.

The government now has a mixed record in its modern tech monopoly cases. The Justice Department won both of its monopolization cases against Google’s search and ad tech businesses, though a judge failed to deliver most of the remedies it wanted in the search case. Closing arguments in the remedies phase of the ad tech case are scheduled for later this week.