Today, we filed a motion for summary judgment, asking the District Court to dismiss the Federal Trade Commission’s (FTC) effort to unwind the decade-plus acquisitions of Instagram and WhatsApp. From the very beginning, the FTC has failed to state a plausible claim, and the agency has done nothing to build its case through the discovery process to prove otherwise.
The evidence shows exactly what we said it would: Meta faces fierce competition from a range of platforms – from TikTok and X to YouTube and Snapchat. Further, Meta’s acquisitions of Instagram and WhatsApp, which regulators reviewed and cleared more than a decade ago, have benefited consumers. Through billions of dollars and millions of hours of investment, we’ve made the apps better, more reliable, and more secure.
Our motion, which we outline below, asks the court to award Meta summary judgment and dismiss the FTC’s lawsuit.
We Compete Fairly and Face Strong Competition
The FTC’s initial complaint was dismissed in its entirety for failure to state a plausible claim. The agency’s amended complaint was allowed to proceed based on its promise to provide evidence that would support its claims of alleged harm to competition and consumers caused by Meta’s acquisitions of Instagram and WhatsApp; the existence of a “personal social networking services” (PSNS) antitrust market; and Meta’s alleged monopoly power in that market.
After more than a year of pre-complaint investigation and two years of extensive litigation discovery, it is more apparent than ever that the FTC cannot prove any of these claims.
Our acquisitions of Instagram and WhatsApp are good for consumers and businesses.
- The FTC has no evidence establishing that Meta’s conduct was “exclusionary” – which is defined as conduct that actually caused harm to competition and consumers.
- Attempting to prove its case, the FTC relies solely on speculative claims that having more competitors may be better and that consumers would have benefitted more if Instagram and WhatsApp had been left without Meta’s resources. The law rightly requires more than speculation.
- Even if the FTC did have a basis for its claims that the deals harmed consumers, the evidence shows the opposite. In reality, our significant investment of time and resources since acquiring the two apps has made them into the services that millions of users enjoy today for free.
- Our acquisition of Instagram has led to a more reliable app for consumers and has helped millions of businesses better engage with and grow their customer base.
- When we acquired Instagram, it had about 2% of the users it has today, just 13 employees, no revenue, and virtually no infrastructure of its own.
- Many of the features that are now central to the Instagram community – direct messaging, live video streaming, shopping, and stories – were built on Meta’s core technology infrastructure after the acquisition.
- Our sophisticated ad creation process, delivery options, and new advertising products provide greater choice for advertisers and consumers.
- We removed the WhatsApp subscription fee to make it free of charge worldwide, added valuable new features like voice and video calling, and made the app more secure by providing end-to-end encryption.
- As we anticipated and intended when we made the acquisitions, welcoming Instagram and WhatsApp to the Meta family of apps has provided countless benefits for consumers.
The FTC fails to establish a relevant antitrust market.
- The FTC has failed to meet its burden to present evidence establishing a relevant antitrust market and proving that it has included all reasonable substitute services in its market definition.
- Instead, its alleged “personal social networking services” market is a textbook example of a gerrymandered market, using an artificially limited set of only four companies – Facebook, Instagram, Snapchat, and MeWe – ignoring many of the most popular activities people engage in on Facebook and Instagram.
- The FTC relies on unsupported claims that Meta’s apps are “different” – claims that the FTC’s expert witnesses can’t support. In fact, those experts can’t even agree on how Meta’s apps are allegedly different, why those differences matter, or even what “personal social networking services” are or include.
- In reality, people can and do substitute many services for Facebook and Instagram without friction or cost. A person displeased by the selection of Reels on Facebook or Instagram can move to a similar or even identical short-form video on TikTok or YouTube.
The FTC cannot credibly claim Meta has monopoly power because no such power exists.
- The FTC has no evidence of monopoly power because the alleged monopoly power doesn’t exist.
- The FTC claims that Meta has a “dominant share” of the artificial “personal social networking services market,” but its market share numbers are meaningless without a properly defined market. And, as the FTC itself acknowledges, Meta’s products are offered for free and in unlimited quantities – and always have been.
- Consumers have benefited as a result of the billions invested to improve the quality of our services: the number of users and amount of usage of all of Meta’s services have increased dramatically since their inception or acquisition, which reflects an improvement in quality of our apps and experiences for consumers.
No Sale Is Ever Final
The FTC reviewed both acquisitions years ago and allowed them to close. The decision to revisit done deals is tantamount to announcing that no sale will ever be final. This lawsuit not only sows doubt and uncertainty about the US government’s merger review process and whether acquiring businesses can actually rely on the outcomes of the regulatory review process, but it will also make companies think twice about investing in innovation, since they may be punished if that innovation leads to success.
US antitrust laws have created the competitive landscape within which American companies must compete to thrive. This competition has driven US companies like Meta to make risky bets, invest, innovate, and deliver value to people, advertisers, and shareholders. Acquisitions of start-ups by large technology companies, like ours of Instagram and WhatsApp, provide essential capital for new ideas and drive the development of new products and technologies. Those deals are risky bets, and many of them aren’t successful in the long run. Companies would be loath to invest in improving purchased assets if there is the possibility that those assets will be unwound (and the progress made undone) through legal challenges years later.
Put simply, antitrust laws are supposed to promote competition and protect consumers, not punish companies for innovating to give people greater value and choice. We will continue to vigorously defend our company and the ability of people and businesses to choose the great products we offer.
