Meta victory reveals cracks in antitrust enforcement

ANALYSIS By Tekendra Parmar | Contributing Editor

Last week, in doling out judgment on the Federal Trade Commission's antitrust lawsuit against Meta, Judge James E. Boasberg invoked the Greek philosopher Heraclitus. “Believing that the only constant in the world was change, the Greek philosopher Heraclitus posited that no man can ever step into the same river twice,” the judge said. “Like Heraclitus's river, the rapids of social media rush along so fast that the court has never even stepped into the same case twice.”

Considering the competitiveness of the social media market, the court decided Meta was not the monopoly the FTC claimed it to be. 

The agency alleged that Meta holds monopoly power in the “personal social networking” market in large part because it used its enormous financial resources to overpay for competitors Instagram and WhatsApp in what the FTC said was a violation of the 1890 Sherman Antitrust Act. Meta paid $1 billion for Instagram in 2012 and more than $20 billion for WhatsApp in 2014.

Meta’s apps have rapidly changed since the antitrust cases over those purchases were first brought in 2020. Competitors have also changed: The judge acknowledged TikTok wasn’t even on the horizon when the courts first heard challenges to Meta’s alleged anticompetitive practices. 

A key vector of the FTC argument was that Meta’s monopoly position allowed it to deliver a lower-quality version of its product. It pointed to the increased number of ads users are served on the platform, the decrease in content users see from close friends and family, and declining consumer opinions about Meta’s quality.

The court rejected these arguments. It said that although ads had increased, the relevance of ads had improved. It also highlighted lower user adoption for paid versions of Meta products in Europe, indicating that users didn’t really mind ads. It found claims that Meta was underinvesting in content from friends and family unpersuasive, noting that users saw less friends and family content because people were posting less. (Apparently, the judge had missed the fact that users are posting less because Meta stopped incentivizing people to post with changes to its algorithm in 2022.) 

To be sure, the case is in no uncertain terms a win for Big Tech. This administration also doesn’t seem to be interested in bringing out any new antitrust enforcement, which likely means well-capitalized AI companies will be given the clear opportunity to acquire competitors as they see fit. 

If competition from TikTok and YouTube are enough to suggest that Meta’s products aren’t monopolistic, it says more about the limits of antitrust laws than it does Meta’s monopolistic nature.

If you’ve ever tried leaving Facebook or Instagram, for instance, you know how difficult it can be. It’s even more of a headache for content creators, influencers and others who can earn a substantial living on social media. That’s why content creators who get big on TikTok still post on Instagram, even though Meta’s algorithms aren’t as friendly to discovering new creators. For users, leaving a Meta platform means walking away without the communities, followers and friends. The opportunity cost of leaving keeps people locked in. For potential competitors, it means starting a social media platform is a high-risk business when a small number of companies are the biggest game in town.

The European Commission, with its General Data Protection Regulation, has tackled this by providing legislation allowing users to take data from one tech platform to another—in part a response to a growing concern around the global reliance on American tech. Within the United States, users are locked into legacy tech systems that have time and again betrayed privacy, security and continue to be conduits for mis- and disinformation that erodes citizens’ faith in democracy.

If Meta really isn’t a monopoly, users should be able to walk away without losing access to the social web. That’s simply not the case.