FTC Trial Puts Meta's Instagram, 50% of US Ad Revenue, at Risk Over Monopoly Claims

Washington D.C. – Social media giant Meta Platforms is currently embroiled in a high-stakes antitrust trial initiated by the U.S. Federal Trade Commission (FTC), which could potentially force the company to divest its Instagram and WhatsApp platforms. The FTC alleges that Meta, through its acquisitions of these key services, has established and maintained an illegal social media monopoly, hindering competition and innovation in the market. This sentiment resonates with observations from industry commentators, with Lee Hepner stating, "One of the effects of Meta’s FB-IG-WhatsApp monopoly is it doesn’t have to maintain the garden as long as the hedges are impenetrable."

The core of the FTC's case, filed in 2020, centers on Meta's 2012 acquisition of Instagram for $1 billion and its 2014 purchase of WhatsApp for $19 billion. Regulators contend that these acquisitions were strategic moves to "squash competition" and align with a "buy rather than compete" strategy, citing internal emails from CEO Mark Zuckerberg. During opening statements, FTC lawyer Daniel Matheson argued that Meta used its monopoly to generate substantial profits while consumer satisfaction declined.

Meta, however, vehemently denies the allegations, asserting that the acquisitions fostered growth and improved both Instagram and WhatsApp, benefiting users. The company argues that it faces intense competition from a diverse array of platforms, including TikTok, X (formerly Twitter), and YouTube, and that the FTC's definition of the social media market is too narrow. Meta's chief legal officer, Jennifer Newstead, called the case "absurd," suggesting it deters American tech investment.

The trial carries significant implications for Meta, particularly regarding Instagram, which is estimated to generate over 50% of the company's U.S. advertising revenue in 2025. Losing Instagram would be a devastating blow, severely impacting Meta's user and revenue growth prospects. The outcome could reshape the social media landscape, potentially leading to a renaissance of new startups if Meta's dominance is curtailed.

The broader sentiment regarding Meta's market position, as echoed by Hepner and Garry, suggests a concern that unchallenged dominance may lead to stagnation or a lack of incentive for internal improvement. As Garry aptly puts it, "The garden has weeds," implying that without competitive pressure, the quality and user experience within Meta's ecosystem might suffer. The trial is expected to continue for several weeks, with Mark Zuckerberg slated to testify regarding his past intentions behind the acquisitions.