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FTC Seeks Meta Divestment in Landmark Antitrust Trial

Word on the StreetMonday, Apr 14, 2025 12:06 am ET

2min read

Meta, the parent company of Facebook, is facing a landmark antitrust lawsuit filed by the Federal Trade Commission (FTC) in Washington. The trial, which began on Monday, could potentially force Meta to sell its popular platforms, Instagram and WhatsApp, if the FTC prevails. The lawsuit alleges that Meta's acquisitions of Instagram in 2012 and WhatsApp in 2014 were aimed at eliminating competition in the social media market and maintaining its monopoly.

The case is significant as it could be the largest antitrust lawsuit since the breakup of AT&T's telephone monopoly over 40 years ago. The outcome of this trial will have substantial implications for Meta's future, particularly its $1.4 trillion advertising business. The trial is expected to last seven to eight weeks, with numerous witnesses and evidence to be examined. Key figures, including Meta CEO Mark Zuckerberg, former COO Sheryl Sandberg, and Instagram head Adam Mosseri, are scheduled to testify.

The FTC's evidence includes an internal email from Zuckerberg in 2012, where he stated that the acquisition of Instagram was intended to suppress potential competitors. The FTC argues that this action violates U.S. antitrust laws. The commission believes that the only way to restore competition in the U.S. social media market is to force Meta to divest Instagram and WhatsApp. This move, according to the FTC, would enable smaller social media companies to compete for users and advertising revenue, thereby weakening Meta's control over the industry.

Meta, however, maintains that it has always competed fairly and that the current regulatory actions are a result of its significant success. Meta's legal team emphasizes that the acquisitions of Instagram and WhatsApp were approved by regulators over a decade ago. They argue that the FTC's lawsuit could set a precedent where any transaction in the U.S. could be retroactively challenged by the government.

The lawsuit has also garnered attention due to the political dynamics between Zuckerberg and former U.S. President Donald Trump. During Trump's first term, the U.S. government filed an antitrust lawsuit against Meta. Reports suggest that Zuckerberg personally lobbied Trump to have the FTC drop the lawsuit. However, Trump's relationship with Zuckerberg has been strained, partly due to Meta's decision to ban Trump's accounts on its social media platforms following the Capitol riot.

Despite the strained relationship, Zuckerberg made a $1 million donation to Trump's inaugural fund during this year's presidential inauguration. Additionally, Zuckerberg appointed Dana White, a close ally of Trump, to Meta's board of directors. These actions have been interpreted as Meta's attempts to curry favor with Trump. There are speculations that Trump might exert political influence in this case, potentially leading to a lighter sentence for Meta if the FTC wins, thereby avoiding the division of Instagram and WhatsApp.

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