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FTC appeals Meta antitrust ruling after court dismisses case
The Federal Trade Commission (FTC) announced it will appeal a US District Court ruling that dismissed its antitrust case against Meta.
In November, Judge James Boasberg concluded that the FTC did not sufficiently prove that Meta held an illegal monopoly over a segment of social networking services for connecting with friends and family.
The FTC plans to ask the US Court of Appeals in DC to review the decision, asserting that the trial evidence supports its case.
The agency argued that Meta maintained its dominance by acquiring competitors like Instagram and WhatsApp, which it claimed limited consumer options.
🔗 Source: The Verge
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Implications, context, and why it matters.
The appeal’s success hinges on the FTC meeting Section 13(b)’s forward-looking standard and contesting the court’s market definition
- The lower court’s conclusion under Section 13(b) of the FTC Act must be overturned, since a current or imminent violation was required to be proven, including that Meta has monopoly power now, and that market conditions have shifted since the Instagram (2012) and WhatsApp (2014) acquisitions 1.
- The relevant market was treated as including TikTok and YouTube, based on evidence that users readily switch between platforms 2.
- An explanation will need to be provided for how Meta’s market share in the court-defined market lines up with the thresholds that are usually used to infer monopoly power.
- In the broader social media market used by the court, Meta’s share of time spent was put below 50% and a decline was described 1.
- That level was framed as well under the roughly 65% to 70% share that courts often require to infer monopoly power 3.
Despite the Meta loss, continued merger enforcement could reshape dealmaking for mid-size acquirers
- Tech investors and mid-sized companies should plan for close merger review even if this case ends the same way.
- The agencies’ 2023 Merger Guidelines warn that acquisitions by firms the agencies may label “dominant” can face scrutiny even around a 30% share 4.
- As a result, large tech platforms may stay careful when buying in disputed areas such as social media or creator tools.
- A cooler deal climate can leave more room for private equity (PE) firms, investment firms that buy stakes in companies, plus other strategic buyers.
- By watching deals challenged or dropped by the biggest tech firms, these buyers can spot startups where bidding pressure is lower 4.
- Enforcement is expected to stay steady across administrations, so this opening may last 5.
