The CEO of Facebook takes the stand
The FTC’s Case against Meta, a Social Media monopoly, and its Challenge to Competition Laws and the Law and Facts
During Meta’s opening arguments, the company’s lead lawyer Mark Hansen argued that the FTC’s market definition is artificially narrow by excluding TikTok, iMessage, and other services. The case was called a bag of FTC theories at war with the law and facts.
The arguments made before the Judge on Monday were outlined by lawyers in motions over the last 4 1/2 years.
The agency says that Meta only has a limited monopoly on the market for personal social networking services in the US, despite the fact that it has 20 million users worldwide. By including these two services, the FTC claims that Meta owns nearly 80 percent of active users in the market.
Government lawyers plan to call a parade of witnesses, including former Chief Operating Officer Sheryl Sandberg and CEO Mark Zuckerberg, to show Meta has broken U.S. competition laws in amassing its social media empire.
The trial is likely to discuss technical details. The Federal Trade Commission had a sneak peek at that on Monday. Attorneys for the agency claimed that Meta controls a lot of the personal social networks market.
Meta is a monopoly because it has never raised prices on consumers, and rivals don’t charge, according to the argument made by Hansen. The amount of time people spent on their platform would be reduced if the company charged. “The average American uses more than 40 apps every month,” Hansen said. “An app that loses minutes will lose advertising revenue as well.”
Silicon Valley Tech Battles, the Mueller Investigation, and the Trump-Mathematic Insights into the Tech Sector: The Case of Meta
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 wants to stop the use of Google’s 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 is in the process of prosecuting another case in which the company is accused of monopolising the market for online ads.
The legal actions against tech companies show that there is growing public and political resentment against Silicon Valley, as evidenced by the tech critic’s time at the FTC. Many people within the Trump administration think the tech industry should be reined in.
In recent months, Meta’s Zuckerberg — whom Trump once threatened to imprison — has been ingratiating himself with Trump. Meta donated $1 million to Trump’s inaugural fund. The company paid Trump $25 million to settle a lawsuit over his social media account suspensions in the wake of the Jan. 6 Capitol riots. And Meta has made company changes that align with Trump’s priorities, including ending a fact-checking program and rolling back diversity, equity and inclusion initiatives.
Facebook or Not Facebook? Mark Zuckerberg and the FTC: A New Look at a Silicon Valley Tech Executive’s Warnings about the Acquisition of the Photo-sharing Service
Andrew Ferguson, Trump’s pick who now heads the agency, has brushed aside speculation that the case would be dropped, telling Bloomberg last month: “We don’t intend to take our foot off the gas.”
The FTC began working on the acquisition of the photo-sharing service. Matheson showed internal emails in which Zuckerberg warned colleagues that Instagram’s early rise was “really scary” for Facebook. He sent several emails complaining about the slow pace of development of Facebook’s own photos app, Facebook Camera.
The FTC attorney said that these messages show Meta’s motivation to crush alternative services.
“They decided that competition was too hard,” Matheson said in his opening statement. “And it would be easier to buy out their rivals rather than compete with them.”
He pointed out that 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 took good pictures. The filter was working well. They had good taste in their product. It was an experience people enjoyed,” said Zuckerberg, noting at another point that he had been debating building a photo service but that Instagram was ahead of the game. “So I thought it was better to buy them,” he said.
The second day of his testimony was tense, with the FTC looking at old internal emails to illuminate the thinking of the CEO ahead of both Meta’s $1 billion purchase of Instagram and its $19 billion acquisition of Facebook.
This isn’t the first time that a tech executive has testified. In the course of more than half a dozen speeches to the Congress, Facebook CEO Mark Zuckerberg apologized to parents in the audience for the harm he’s done to their children on his platforms.
At the end of the day, as the FTC’s Matheson was still quizzing Zuckerberg about his intent behind buying Instagram, Judge Boasberg asked to end the testimony. As he exited the witness stand, one of his security guards motions for them to leave the room before everyone else leaves, an attempt for the CEO to get ahead of the situation.
In court, Zuckerberg downplayed the threat Instagram posed to Facebook at the time. He said yes and then asked if the two apps were competing to connect friends. Was that the most important thing that was happening? Not to my recollection.”
When was Facebook? The FTC Case: James Boasberg, CEO, and the Future of the Tech Industry: A Brief History of the Interference Problem
The president’s interference in the case is a constant worry that all of us need to stay very vigilant about, according to the former FTC Chair.
The lead attorney for the case asked the founder of Facebook to think back on when he thought his company wasn’t going to make it.
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. (At one point, Boasberg asked the Meta CEO for a crash course on what “native code” meant. Zuckerberg eagerly obliged.)
The company saw opportunities where it could invest and grow its own products into apps used around the world. The FTC believes that the same situation would have happened if Zuckerberg had wanted to sell to any of the other companies.
“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.”