Mark Zuckerberg faces a life-and-death lawsuit

According to Reuters , Meta - Facebook's parent company is facing an important trial with the Federal Trade Commission (FTC). Specifically, Meta is accused of illegally building an "empire" in the social networking market by spending billions of dollars to acquire Instagram and WhatsApp. The FTC filed the lawsuit in 2020, and the case began to be heard on April 14 (US time).

The agency's goal is to force Meta to restructure or sell parts of its business, which includes Instagram and WhatsApp.

In response, Meta's chief legal officer Jennifer Newstead called the lawsuit a disincentive to tech investment. "It's absurd for the FTC to try to break up a great American company at a time when the administration is trying to save Chinese-owned TikTok," Newstead wrote in a blog post.

What did Mark Zuckerberg say?

The trial featured Meta CEO Mark Zuckerberg on the witness stand. He defended the acquisitions, calling them “original thinking” that led to big investments and user benefits.

However, the FTC presented old emails from Zuckerberg, in which he discussed “neutralizing a potential competitor” (Instagram) and acknowledged WhatsApp’s strength compared to Messenger.

The FTC alleges that Meta feared the rapid growth of Instagram and WhatsApp, leading it to overpay to acquire both. Photo: WFAA.

"Messenger didn't beat WhatsApp, Instagram grew so much faster than us that we had to buy them for $1 billion ," the email read. Zuckerberg also acknowledged the "urgency" in developing a better photo-sharing app before buying Instagram.

This is the third major tech antitrust case to go to trial in the past two years. In 2024, the US Justice Department won a case against Google over its monopoly on internet search.

In addition to Meta and Google, the US Department of Justice has also sued Apple, while the FTC filed a lawsuit against Amazon, accusing the companies of violating antitrust laws.

“For more than 100 years, American public policy has insisted that companies must compete if they are to succeed. The reason we are here is because Meta broke the bargain,” Daniel Matheson, the FTC’s lead attorney in the case, said in his opening statement.

Zuckerberg defended the acquisitions, calling them "original thinking" that led to big investments and benefits for users. Photo: Reuters.

The FTC argued that Zuckerberg said in 2006 that Facebook was used to connect with “real friends.” The agency later argued that Meta had a monopoly in the social networking space since 2011, and that SnapChat was one of the few platforms comparable to Facebook and Instagram.

In response, Zuckerberg described the social media market as much broader than the government defines it. Connecting friends and family is “one of the core things” the company does, the Facebook founder said, but Meta also engages in “the general idea of ​​entertainment, learning about the world, and discovering what’s going on.”

Moment of survival

Reuters said the lawsuit posed an existential threat to Meta, which by some estimates gets about half of its US advertising revenue from Instagram.

Losing Instagram in particular could have serious consequences for parent company Facebook’s bottom line. While Meta doesn’t break out specific revenue figures for each app, advertising research firm Emarketer predicted in December 2024 that Instagram will generate $37.13 billion . Instagram also generates more revenue per user than any other social platform, including Facebook.

Meta faces the risk of having to sell Instagram and Whatsapp if it loses the case. Photo: Reuters.

WhatsApp has so far contributed only a small portion of Meta's total revenue, but it is the company's largest app by daily users and is ramping up efforts to monetize tools like chatbots.

Meta argues that the deals benefit consumers and that the market is highly competitive, with the rise of TikTok and other platforms. Meta’s lawyers also emphasize that reversing deals approved more than a decade ago would set a dangerous precedent.

The WSJ , citing legal experts, also warned that the FTC would have a hard time proving that Meta would not have achieved the same success without these acquisitions. More importantly, reversing mergers that were approved years ago is extremely rare.

For its part, the FTC accused Meta of overpaying for both because it feared the rapid growth of Instagram and WhatsApp. Facebook’s parent company, in turn, argued that it faced stiff competition from other platforms, particularly TikTok, and that video was a key area of ​​competition.

Source: https://znews.vn/mark-zuckerberg-dung-truoc-vu-kien-song-con-post1545870.html