Meta CEO Mark Zuckerberg testified in court as part of an antitrust trial initiated by the Federal Trade Commission (FTC).

The FTC argues that Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were intended to eliminate competition.

The FTC seeks a ruling to force Meta to divest Instagram and WhatsApp. This could significantly impact the company’s revenue, especially since Instagram is projected to account for over half of Meta’s US advertising revenue in 2025.

Zuckerberg denied allegations that the acquisitions aimed to suppress competition. He argued that Meta’s focus has shifted to social engagement based on content sharing rather than personal updates.

The trial could continue into July, and if the FTC wins, it must prove that divesting Meta’s assets would restore competition.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Historical patterns show antitrust cases reshape tech winners and losers

Meta’s legal battle with the FTC follows a recurring pattern of government intervention against dominant tech companies that has reshaped the competitive landscape.

The Microsoft antitrust case of the 1990s provides a relevant precedent, where government action against its bundling of Internet Explorer with Windows created space for new competitors like Google to flourish, despite Microsoft avoiding a breakup1.

Earlier cases against IBM (1969) and AT&T (1974) had significant impacts, with AT&T’s eventual breakup into “baby bells” fundamentally restructuring telecommunications markets2.

Investors should note that Microsoft’s stock stagnated for years following its antitrust battle, with analysts warning that today’s tech giants could face similar declines in growth, profit margins, and valuations if regulatory pressure intensifies3.

The most significant impact isn’t always a company breakup but rather how the litigation process itself forces companies to modify business practices that originally drove their market dominance.

2️⃣ Antitrust enforcement has evolved beyond price effects to innovation concerns

The Meta case highlights how modern antitrust enforcement has evolved beyond traditional price-based consumer harm to focus on competition for innovation and future markets.

While traditional monopoly cases centered on price increases, regulators now emphasize how acquisitions of potential competitors (like Instagram and WhatsApp) can harm consumers by eliminating future innovation, even when services remain free4.

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