Meta Faces Antitrust Reckoning: FTC Trial Could Force Breakup Over Instagram and WhatsApp

Edited by: TJVNews.com

In a case that could redefine the limits of government power over Big Tech, The Wall Street Journal reported on Monday that Meta Platforms Inc., the parent company of Facebook, Instagram, and WhatsApp, is now locked in a historic antitrust battle with the Federal Trade Commission (FTC)—one that could potentially force the tech giant to break itself apart.

On Monday, the trial opened with a dramatic start: FTC attorneys called Meta CEO Mark Zuckerberg to the witness stand. The agency is seeking to compel Meta to divest from both Instagram and WhatsApp, arguing that the company has used its acquisition strategy to unlawfully cement a monopoly over the social networking industry. In its opening argument, FTC attorney Daniel Matheson accused Meta’s leadership of deliberately snuffing out competition rather than innovating: “They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them,” The Wall Street Journal quoted him as saying.

The heart of the FTC’s complaint lies in Meta’s prior acquisitions—particularly Instagram in 2012 and WhatsApp in 2014. These platforms now represent vital revenue engines for Meta’s overall business model, which is deeply dependent on targeted advertising, as was reported by The Wall Street Journal. A forced breakup would not only disrupt Meta’s revenue streams but also significantly alter the architecture of modern social networking.

The FTC contends that Facebook, Instagram, and WhatsApp together form a distinct market for “personal social-networking services,” which users primarily use to connect with family and friends. According to the FTC, Meta controls this space to a degree that stifles innovation and prevents meaningful competition.

Zuckerberg’s testimony, which lasted four hours on Monday and is set to continue into Tuesday, reflected Meta’s core argument—that the FTC’s case is outdated and overlooks the competitive realities of today’s tech landscape. “Facebook is a vehicle for connecting with friends and family,” Zuckerberg acknowledged, but insisted the platform has evolved into “more of a broad discovery-entertainment space,” according to the report in The Wall Street Journal.

Meta’s legal team, led by Mark Hansen, emphasized that user behavior has shifted dramatically in the past decade. Social media is now dominated by video-sharing platforms and newer entrants like TikTok and YouTube, both of which command massive user engagement and advertising dollars. The Wall Street Journal reported that to illustrate this, Hansen cited the reaction to a January TikTok outage, which caused a near-instantaneous ripple of panic and frustration among users—proof, he claimed, that competition in social networking is far from theoretical.

As The Wall Street Journal report detailed, the FTC’s case has had a tumultuous journey through the legal system. Initially filed in 2020 under the Trump administration, the lawsuit was dismissed in 2021 by U.S. District Judge James Boasberg, who found the government’s case lacking in factual support. However, the FTC, under President Biden, filed an amended complaint that Boasberg allowed to proceed, finding the revised version more robust.

More recently, the case has taken on new momentum under FTC Chair Andrew Ferguson, a Republican appointee who has pledged to see the case through to its conclusion, regardless of political consequences. Notably, The Wall Street Journal report revealed that Zuckerberg had been personally lobbying former President Donald Trump in recent weeks in a bid to reach a pre-trial settlement. While Meta did make a $25 million concession earlier this year to resolve a separate lawsuit tied to Trump’s social media suspensions, those overtures failed to produce a broader settlement by Monday’s opening arguments.

Legal experts agree the case could set a historic precedent for antitrust enforcement in the digital age. At stake is not just the future of Meta’s business empire but also the broader question of how the U.S. government defines and regulates monopoly power in an era of rapidly shifting technology and user behavior.

Critics of the FTC argue that the lawsuit is effectively penalizing Meta for successful business decisions made years ago with regulatory approval. Instagram and WhatsApp were acquired with little pushback at the time. Now, regulators are retroactively seeking to unwind those deals in a political climate more skeptical of Big Tech.

Supporters, on the other hand, say the case is long overdue. They argue that Meta has built a walled garden that locks users in and keeps potential competitors out, suppressing innovation and consumer choice.

At the heart of the FTC’s argument is its definition of the “personal social-networking” market—a market it says Meta overwhelmingly dominates. The FTC claims that apps like TikTok, YouTube, X (formerly Twitter), and Pinterest don’t qualify as competitors to Meta’s core services because they function as entertainment platforms or “shared interest” communities rather than tools for personal connection, as per the information provided in The Wall Street Journal report.  Only Snapchat, according to the FTC, truly competes with Meta’s social products, though with a significantly smaller footprint.

The implications of this definition are enormous. If Judge Boasberg agrees that Instagram, WhatsApp, and Facebook exist in a distinct and monopolized market, Meta could be forced to unwind the deals that gave it control over those platforms.

One of the most contentious points will be the FTC’s reliance on internal communications from 2012, when Facebook acquired Instagram. At the time, CEO Mark Zuckerberg acknowledged in emails that Instagram posed a disruptive threat to Facebook’s dominance, especially as users were shifting from desktop to mobile platforms, as was explained in The Wall Street Journal report. “What we are really buying is time,” Zuckerberg wrote in one of the messages, which the FTC intends to use as evidence that the acquisition was meant to stifle competition before it could fully mature.

Meta’s legal team, led by attorney Mark Hansen, contends that the FTC’s case relies on a flawed assumption: that Instagram and WhatsApp were poised to independently challenge Facebook’s dominance. Instead, Hansen argued in opening statements, Meta took strategic risks on fledgling platforms and turned them into globally scaled services that benefit consumers. “Any way you look at it, the consumers have been the big winners,” Hansen stated, according to The Wall Street Journal.

Meta also argues that modern competition in the digital landscape is fierce and real. The company points to platforms like TikTok, whose temporary outage earlier this year drove users to Instagram as a substitute—evidence, Meta says, that consumers do not view the services as entirely distinct. “When TikTok went down, people went on Instagram,” Hansen noted.

Moreover, Meta has stressed that all of its core products are free, rebutting one of the traditional hallmarks of monopolistic abuse: price increases. Yet the FTC counters with the concept of a “quality-adjusted price”—arguing that Meta exerts its dominance by filling user feeds with more ads, offering less robust privacy protections, and otherwise degrading user experience in ways consumers cannot easily avoid.

Instagram’s importance to Meta’s bottom line cannot be overstated. According to eMarketer, Instagram ads are projected to make up nearly 50% of Meta’s U.S. sales in 2025. With younger users flocking to Instagram and Facebook’s appeal declining among the 18-24 age group, Meta increasingly relies on Instagram to maintain user engagement and advertising revenue. “The loss of Instagram would be a huge blow to Meta’s business,” Jasmine Enberg, principal analyst at eMarketer, told The Wall Street Journal.

Meta maintains that Instagram’s success is a direct result of the resources and innovation it poured into the platform post-acquisition, including the use of Meta’s powerful ad infrastructure. Instagram’s reach in the U.S. has ballooned to over 150 million users—a scale, Meta argues, the app could not have achieved without the merger.

Judge Boasberg’s final ruling will determine whether Meta is liable under federal antitrust law. If so, he will then consider what remedies are appropriate, including the dramatic step of breaking up the company by forcing it to divest from Instagram and WhatsApp.

The FTC is also banking on market-share metrics, claiming that Meta controls over 80% of the personal social-networking space when measured by user engagement time, the report in The Wall Street Journal indicated.  But Meta contests the framing, urging the court to acknowledge the fluidity of digital behavior and the growing influence of platforms like TikTok, YouTube, and others in shaping online communication.

As The Wall Street Journal report highlighted, this case may be one of the most consequential antitrust actions in modern history—testing not only whether past mergers will be reexamined under a more aggressive regulatory lens, but whether the government can legally and practically unwind the architecture of modern social media.

With Zuckerberg already on the stand and more testimony to come, the trial will likely send ripples throughout the tech industry, reshaping how regulators and companies think about competition, innovation, and digital power.