Why the FTC's antitrust case against Meta is a 'huge deal'

Is Meta an illegal monopoly?

That is one of many big questions currently before the courts in the United States, that could have consequences for social media users around the world.

The Federal Trade Commission is alleging that the tech giant broke competition laws when it acquired Instagram and WhatsApp in the early 2010s. If Meta loses this case, the company could be forced to sell both WhatsApp and Instagram.

Today on Commotion, McMaster University policy expert Vass Bednar joins host Elamin Abdelmahmoud to unpack what we know about the U.S. Federal Trade Commission's antitrust trial against Meta.

We've included some highlights below, edited for length and clarity. For the full discussion, listen and follow Commotion with Elamin Abdelmahmoud on your favourite podcast player.

Elamin: Can you give me a sense of just how big of a deal this antitrust case is against Meta?

Vass: Huge deal. A bigger deal than Instagram's initial growth, right? I mean, there's politics. There's the theatre of seeing tech CEOs come forward. There's this element that these acquisitions were approved by the FTC, right? And now in hindsight, we have the FTC going back and maybe not calling their own bluff, but saying, "Wait a second. Something happened here." They allege Meta acquired them with the intention to neutralize so that they depreciated their quality, and sort of under-invested in them, and that there were harms to the market but also harms to consumers. It's fascinating.

Elamin: The idea that you buy a company with the intent to neutralize it versus the intent to …  serve a different business function for us — those are two different arguments. And Facebook started to say, "Hey, there's a business case for why we bought Instagram." But we've uncovered some things from the past that suggest at least a part of what Facebook was thinking about was the threat of growing Instagram.

Vass: Exactly, and how it was drawing people away from them. Now, there are little tiny artifacts, sort of shreds that we see here — Slack messages, email from Mark Zuckerberg to others — that the FTC is alleging reveals or hints at that was the strategy, that was the intent. I do think shouting out those shreds, because they're so fascinating, is important, because I don't think we're ever gonna see that again….

But, you know, those clues are very important. And so is this major aspect, which is what is the relevant marketplace? Is there sufficient competition in that marketplace with Instagram, with WhatsApp? That's at the heart of this case, too. That's the main thing both sides are starting to fight about.

Elamin: Let's get a little bit deeper into this idea of antitrust, because sometimes we maybe take the size of these companies for granted. You don't, and I know that you don't. You're like, "No, they should not have this much control all the time."

Vass: No, big can be cool. We want companies to be big. Big isn't bad.

Elamin: It's just a matter of how dominant they are over every facet of our lives. It's interesting to see this case against Meta in the context of the other tech giant that is in the headlines right now. The U.S. Department of Justice sued Google, saying it broke antitrust laws to be the dominant search engine. And the U.S. Department of Justice won that case. 

Not only did they win that case, there's now a hearing underway to determine how to address Google's monopoly. The company could be forced to sell Chrome, which is its browser, among other measures. How do you think what's happening with Google is gonna maybe influence what's happening with Meta?

Vass: I think that both cases represent a transition across the presidency and a transition across the FTC, right? We've seen Lina Khan, visionary millennial progressive enforcer, is no longer there. So a lot of people have wondered if under President Trump, who had billionaires at his inauguration—

Elamin: Including Mark Zuckerberg.

Vass: Including Mark Zuckerburg, making donations into his inauguration fund. There was speculation that there may be pressure to drop or settle these cases. In terms of how I think the cases will intersect, I think it shows the strength of the FTC and its appetite to enforce, and fundamentally — again, fascinating — the U.S. is doing this homework in their backyard. There are plenty of jurisdictions that want to go after big tech. But it is a huge deal to look at these giants and scrutinize them and say, "Listen, maybe you acquired the market dominance. Maybe you didn't really earn it."

You can listen to the full discussion from today's show on CBC Listen or on our podcast, Commotion with Elamin Abdelmahmoud, available wherever you get your podcasts.

Interview with Vass Bednar produced by Jean Kim.