Meta, Trump, Boasberg, The FTC, and the Ads: Why Do Meta Apps Live and Work in a Crowded Online World?
The FTC’s case involves an “incoherent parsing of competition” that makes the case that Meta is a dominant player in a crowded online world, according to Hansen.
The broad strokes of these arguments have been outlined by lawyers in pretrial motions over the last 4 1/2 years, but on Monday, they were made before U.S. District Judge James Boasberg, who will be presiding over the trial in Washington, D.C., for the next eight weeks.
The most serious threat Meta has faced has been the case that was filed during Trump’s first term. If the FTC prevails, Meta could be forced to break up its $1.3 trillion advertising business. Meta is integrated with user and advertising systems so having to separate the companies would be a problem.
Meta’s CEO solemnly strode into a Washington, DC courtroom with two bodyguards. He was there despite his last-ditch attempts to avoid a trial to defend his company from being broken up.
The trial is expected to involve vigorous debates about technical details. The Federal Trade Commission previewed that on Monday. The agency’s attorneys said that Meta controls the majority of the personal social networks market.
All of Meta’s major apps are free, because rival apps also do not charge, so the company isn’t a monopoly, according to Hansen. If a company charged, it would drive down the amount of time people spent on their platform. “American’s use more than 40 apps every month,” Hansen said. If the app loses minutes it could lose advertising revenue as well.
Trump’s Twitter Twist: The Case against Google, Facebook and the Silicon Valley Spinning Tech Co. The FBI Filed Antitrust Indictment
It is the third time in recent years the federal government has hauled a Big Tech company to court seeking to split up parts of a Silicon Valley business.
The Department of Justice has asked for a forced sale of the popular Chrome browser. A phase of that trial focused on how Google must change its business to comply with competitive law is scheduled for April. The government alleges that the company is violating antitrust laws by controlling the market for online ads.
Taken together, the legal actions against the tech companies underscore growing public and political backlash against the business practices of Silicon Valley, a skepticism that was magnified when tech critic Lina Khan headed the FTC during the Biden administration. But even Republicans, and many top Trump officials, believe the tech industry power should be reined in.
The case follows a nearly six-year investigation across multiple administrations. The relationship between the two men was bad for a long time. In the last several months, the president has been warmed up by the Facebook founder. Meta paid $25 million to settle a lawsuit brought by Donald Trump over the suspension of his social media accounts. And Meta has taken a number of steps to appease Trump, including ending its fact-checking program, something Trump supporters and other conservatives have long attacked as biased.
Andrew Ferguson, the pick for Trump’s cabinet, brushed aside rumors that the case would be dropped but insisted that they wouldn’t take their foot off the gas.
Facebook and Instagram versus Instagram: How the CEO and the FTC Meteorized? A witness stand testimony at the First Trademark Court hearing in Los Angeles
While Meta may be fighting a breakup now, Zuckerberg has clearly been thinking about the possibility for a while. “I understand the business value of having Instagram and Facebook together, so I don’t raise this lightly,” he wrote in 2018. This is not the likely outcome, I am not suggesting that. I don’t think it’s as crazy as it may seem.
The FTC attorney said in court that the messages show Meta’s motivation to crush alternative services because of its size and influence.
“They decided that competition was too hard,” Matheson said in his opening statement. It would be more convenient to buy out their rivals rather than compete with them.
He said the quality of Meta’s apps has improved on every objective measure. People use more of something when it becomes better, he said: “That’s economics 101.”
The camera was pretty good. The filter was not bad. They had good taste for their product. “People enjoyed it and it was an experience that I was debating about building a photo service, but that was ahead of the game,” he said at one point. I thought it was a good idea to buy them.
His second day on the witness stand was at times tense, with FTC lawyer Mark Hansen repeatedly pointing Zuckerberg to old internal emails, trying to illuminate the CEO’s thinking ahead of Meta’s 2012 Instagram purchase for $1 billion and its 2014 take-over of WhatsApp for $19 billion.
This is not the first time the tech executive has testified under oath. When he apologized to parents in Congress for any harm his platforms may have had on their kids, it was the 12th time that he addressed Congress.
At the end of the day, as the FTC was asking questions about his intent behind buying an app, the judge asked to end the testimony. The security guard moved for the guests to leave the room before everyone else did, in an attempt for the CEO to be ahead of the game.
At a time when there was a threat to Facebook, he downplayed it. “Yeah, of course,” he said in response to Matheson asking if both apps were competing to connect friends with each other. Is that the main thing going on? Not to my recollection.
From Facebook to the Finsicom Crowd: How a FTC CEO Could have Solved the “Measurements” in the FTC Meddling Case
Former FTC Chair Lina Khan, who advanced the case during the Biden administration, said Monday on CNN that the president meddling in the case is “a constant worry that we all need to stay very vigilant about.”
Shortly after he was sworn in, the Federal Trade Commission’s lead attorney for the case, Daniel Matheson, asked Zuckerberg to reflect back on when Facebook was the underdog.
While Matheson’s line of questioning at times felt monotonous, it seemed at least partly intended to provide historical context for Chief Judge James Boasberg, who admitted during pre-trial that he’d never used a Meta service. The Meta CEO was asked to explain the meaning of native code at one point. Zuckerberg eagerly obliged.)
To hear Meta retell it, the company saw opportunities where it could invest and grow fledgling products into now-massive apps used around the world. But the FTC argues that, like Zuckerberg’s early refusal to sell to MySpace, Instagram and WhatsApp would have been just fine on their own.
“It’s not too hard to imagine the calls increasing to break up the tech companies, and the next democratic president taking action to do so,” Zuckerberg wrote during President Donald Trump’s first term in office. “At that point, we will face extremely high pressure, brand damage and distraction.”