Meta asks court to dismiss FTC’s monopoly claims

Meta is asking a federal court to dispense with the Federal Trade Commission’s anti-monopoly lawsuit against it, arguing it’s failed to unearth evidence to support its claims.

In a motion for summary judgment filed Friday, Meta argues that the lawsuit should be thrown out because the company believes the FTC won’t be able to prove what it claims is the relevant market in the case or that its acquisitions of Instagram and WhatsApp harmed consumers. The FTC will get a chance to respond, and there will be back-and-forth in court filings before the judge decides how to proceed. A ruling in Meta’s favor could mark the end of the lawsuit, but if the court determines there are still issues of fact that need to be resolved, the judge could set a trial date.

Back in 2021, DC District Court Judge James Boasberg granted Meta’s motion to dismiss the complaint but gave the FTC the chance to file an amended one, which he allowed to move forward. He said the new complaint was “far more robust and detailed than before” and the FTC “may well face a tall task down the road in proving its allegations.”

In its motion for summary judgment, Meta first attacks the FTC’s market definition, saying it’s unreasonably narrow. The FTC defined the relevant market as personal social networking services (PSNS), which are basically sites where there’s a social graph and users can engage with friends and family on primarily personal topics. It includes Facebook, Instagram, Snapchat, and MeWe, according to the FTC.

“The FTC’s initial complaint was dismissed for failure to state a plausible claim,” Meta writes in its filing. “Its amended complaint survived in part, based on the FTC’s commitment to provide evidence that would support the existence of a PSNS relevant antitrust market, Meta’s monopoly power in that market, and harm to competition and consumers from Meta’s acquisitions of Instagram and WhatsApp … After extensive discovery, it is now apparent that the FTC cannot prove any of the required elements of its Section 2 claim.”

The FTC does not include TikTok or YouTube in its relevant market because it says those services serve a different purpose. TikTok is not “driven by users’ desire to interact with networks of friends and family,” the FTC wrote in its amended complaint, and YouTube is used “primarily for the passive consumption of specific media content (e.g., videos or music) from and to a wide audience of typically unknown users.”

But Meta thinks this is wrong. It says the court just needs to look at how social media users interchange content between Instagram and TikTok or YouTube, particularly through their shortform video features. “The FTC contends that 100% of the time spent on Reels is PSNS, including watching Reels posted by celebrities, creators, and public accounts with no connection to the viewer,” Meta says. “The FTC further contends that 100% of the time spent viewing identical short-form videos on TikTok and 8 YouTube Shorts – whether or not posted by people the user actually knows – is not PSNS.”

Meta says that the FTC “must prove that its candidate market includes all reasonable substitutes.” It doesn’t matter if there are differences between the services, so long as “consumers consider them acceptable substitutes notwithstanding such differences,” Meta writes. Under what Meta thinks would be the right market definition — one that includes services like YouTube and TikTok — the company says the FTC can’t plausibly claim it has monopoly power (generally considered to need at least a 60 percent share of the market).

Meta also says the FTC can’t prove that its acquisitions of Instagram and WhatsApp harmed consumers. The agency allowed the sales to go through roughly a decade ago, though antitrust enforcers technically can challenge mergers pretty much whenever they’d like. But the FTC’s lawsuit in this case marks the “first-ever attempt to revisit acquisitions reviewed and cleared by the FTC more than a decade ago,” according to Meta, which adds that such a move “itself threatens beneficial competition and is unsupported.” Meta argues that the “FTC’s clearance of these transactions should create a presumption that the transactions were not anticompetitive, which the FTC has no evidence to rebut.”

Contrary to being exclusionary or harming consumers, Meta says, “In ten years or more since the acquisitions, Instagram and WhatsApp have generated extraordinary consumer-welfare benefits through greatly expanded output of free services, substantial service improvements, and continuous feature innovation.” The company adds that Meta can’t prove that consumers would be better off had the acquisitions never happened — instead, Meta said it’s invested billions into making the apps better and even removed the fee for WhatsApp users.

Meta warns in a blog post about the filing that the FTC’s challenge of its mergers could be dangerous for innovation. “The decision to revisit done deals is tantamount to announcing that no sale will ever be final,” the company writes.

The FTC has until May 24th to file its opposition.