The US tech giant Meta — formerly Facebook — dodged a bullet on Tuesday when US District Judge James Boasberg ruled in its favor in a major antitrust case filed by the US Federal Trade Commission (FTC) in 2020 and ending in May.

The case posed an existential challenge to the company, charging that it had simply purchased Instagram and WhatsApp to stave off competition. An unfavorable ruling would have forced the company to divest from Instagram and WhatsApp.

“The landscape that existed only five years ago when the Federal Trade Commission brought this antitrust suit has changed markedly,” said Judge Boasberg. “While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down.”

“Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The Court’s verdict today determines that the FTC has not done so,” said Boasberg.

What was Meta accused of?

The Federal Trade Commission or FTC, is an independent US agency tasked with enforcement of civil antitrust law — alongside the Department of Justice — as well as protecting consumers.

Prosecutors representing the FTC argued that Meta had systematically tracked and purchased companies that it viewed as competitive threats, following Facebook/Meta CEO Mark Zuckerberg’s 2008 maxim, “It’s better to buy than compete.”

Zuckerberg has since sought to downplay such attitudes, and in April testimony said Facebook had not purchased Instagram in 2012 to neutralize it. He admitted, however, that internal e-mails circulating at the time of its purchase — for $1 billion and stock options — did not fully reflect his true enthusiasm for the non-monetized photo-sharing app.

Instagram was the first company purchased by Facebook that was not scavenged and dismantled but rather allowed to keep running as an individual app.

The FTC claimed that Facebook had enacted policies designed to make it difficult for smaller rivals to enter the market and to “neutralize perceived competitive threats,” at the precise time that the world began to shift from desktop computers to mobile devices.

The move also allowed Meta to connect with a younger audience than that of its original social network, Facebook, as it competed with emerging platforms like Snapchat and later TikTok.

In his ruling, Boasberg said prosecutors had failed to prove “current or imminent legal violation” by the company.

How did Meta react to the ruling?

The FTC argued that Facebook, Instagram and Snapchat competed in a distinct market of “connecting friends and family” that was separate from video entertainment platforms like YouTube or TikTok. 

However, in his verdict, Boasberg said this distinction no longer applies in today’s social media landscape, noting how Facebook and Instafram have both evolved to display short videos reccomended by algorithms, much like TikTok.

The court noted that just 7% of Instagram users nowadays spend their time viewing content from friends, instead mainly watching short videos, or Reels.

“Facebook, Instagram, TikTok, and YouTube have thus evolved to have nearly identical main features,” Boasberg wrote.

Meta welcomed Judge Boasberg’s recognition that the company “faces fierce competition.”

CEO Zuckerberg had made several attempts to get President Donald Trump to intervene on his behalf and have the case dismissed but to no avail.

Since Trump’s return to the White House, Zuckerberg and other tech titans in the US have donated massive sums of money to him. Trump has in turn forcefully sought to bolster big US tech firms and the billionaires that own and run them.

On Tuesday, Meta’s chief legal officer said, “Our products are beneficial for people and businesses and exemplify American innovation and economic growth. We look forward to continuing to partner with the administration and to invest in America.”

Edited by: Zac Crellin