Meta Seeks Dismissal of FTC’s Antitrust Lawsuit, Arguing Lack of Evidence
Meta is requesting a federal court to dismiss the Federal Trade Commission‘s (FTC) antitrust lawsuit against the company, claiming that the agency has failed to provide sufficient evidence to support its allegations.
Background of the Case
In a previous ruling, a judge had dismissed the FTC’s initial complaint but allowed the agency to file an amended one. The judge noted that the new complaint was more comprehensive and detailed than the previous one, but also acknowledged that the FTC might face challenges in proving its allegations.
Meta’s Arguments Against the FTC’s Market Definition
In its motion for summary judgment, Meta primarily challenges the FTC’s definition of the relevant market, which the agency has narrowed down to personal social networking services (PSNS). This market includes platforms like Facebook, Instagram, Snapchat, and MeWe, where users engage with friends and family on primarily personal topics.
“The FTC’s initial complaint was dismissed for failure to state a plausible claim,” Meta writes in its filing. “Its amended complaint survived in part, based on the FTC’s commitment to provide evidence that would support the existence of a PSNS relevant antitrust market, Meta’s monopoly power in that market, and harm to competition and consumers from Meta’s acquisitions of Instagram and WhatsApp … After extensive discovery, it is now apparent that the FTC cannot prove any of the required elements of its Section 2 claim.”
Meta argues that the FTC’s market definition is unreasonably narrow, as it excludes popular platforms like TikTok and YouTube, which the agency claims serve a different purpose. The FTC asserts that TikTok is not primarily driven by users’ desire to interact with friends and family, while YouTube is mainly used for passive consumption of specific media content from a wide audience of typically unknown users.
Meta’s Stance on the Interchangeability of Social Media Content
Meta believes that the court should consider how social media users interchange content between Instagram and platforms like TikTok or YouTube, especially through their short-form video features. The company points out that the FTC’s stance on the matter is inconsistent:
“The FTC contends that 100% of the time spent on Reels is PSNS, including watching Reels posted by celebrities, creators, and public accounts with no connection to the viewer,” Meta says. “The FTC further contends that 100% of the time spent viewing identical short-form videos on TikTok and 8 YouTube Shorts – whether or not posted by people the user actually knows – is not PSNS.”
Meta emphasizes that the FTC must prove that its proposed market includes all reasonable substitutes, regardless of differences between services, as long as consumers consider them acceptable alternatives. Under a broader market definition that includes YouTube and TikTok, Meta claims the FTC cannot plausibly assert that the company has monopoly power, which generally requires at least a 60 percent market share.
Meta’s Defense of Its Acquisitions
Meta also argues that the FTC cannot prove that its acquisitions of Instagram and WhatsApp, which the agency allowed to proceed roughly a decade ago, have harmed consumers. The company notes that this is the first time the FTC has attempted to revisit acquisitions it had previously reviewed and cleared, and such a move “itself threatens beneficial competition and is unsupported.”
Meta claims that since the acquisitions, Instagram and WhatsApp have generated significant consumer benefits through expanded output of free services, service improvements, and continuous feature innovation. The company has invested billions in enhancing the apps and even removed the fee for WhatsApp users. Meta asserts that the FTC cannot prove that consumers would be better off had the acquisitions never taken place.
Potential Impact on Innovation
In a blog post about the filing, Meta cautions that the FTC’s challenge to its mergers could have negative consequences for innovation, stating, ”The decision to revisit done deals is tantamount to announcing that no sale will ever be final.”
The FTC has until May 24th to file its opposition to Meta’s motion for summary judgment.
1 Comment
Meta’s in hot water again, how surprising!