TechScape: The US government may be one step closer to breaking up Meta
Mark Zuckerberg has a fascination with ancient Rome, but last week a court decision threatened the future of another empire: his own.
Judge James Boasberg said the US competition watchdog can pursue the break up of Meta – the owner of Facebook, Instagram and WhatsApp – paving the way for a costly and lengthy legal battle. Boasberg had dismissed the Federal Trade Commission’s first attempt in June, but this time he was swayed by a revised FTC complaint under its new chair, Lina Khan.
As the judge stressed in his 48-page decision, it is “anyone’s guess” whether the FTC will win its case against a $920bn (£675bn) business that can afford very decent lawyers. Boasberg, a Washington-based district judge who hears cases under federal law, has simply ruled that the FTC has a “plausible claim” under the Sherman Act, which prevents monopolistic companies from ripping off consumers.
Even so, Boasberg has given the FTC’s case a boost. He is allowing the claim to proceed even though Meta operates in what competition experts call a zero-price market. As billions of people around the world know, Meta’s services are free – how can consumers in the US be harmed economically by a service they don’t pay for?
The FTC argues that by acquiring Instagram and WhatsApp, Meta stifled competition and ended up giving a poor deal to consumers in the market for “personal social networking” services. It argues that the acquisition of these companies was anticompetitive because it led to poorer service – for instance lower levels of service quality in privacy and data protection – and less choice for consumers. On the latter, the FTC cites the fact that Meta (then Facebook Inc) shut down an app designed to compete with Instagram once it had bought the
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