Meta to face antitrust lawsuit trial as FTC looks to break off Instagram

Facebook’s parent company Meta Platforms will face trial in April as a DC District Court Judge said that the firm will need to face the Federal Trade Commission’s antitrust lawsuit for dominating the social media industry through its acquisition of Instagram and WhatsApp.

This suit was first filed by the FTC in 2020, but was dismissed in 2021, after which an amended complaint was filed. The judge rejected Meta's argument that the case should be dismissed as it "depends on an overly narrow view of social media markets", according to media reports.

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As of recent estimates, Instagram contributes significantly to Meta's overall revenue, particularly through advertising. According to media reports and industry analysis Instagram's ad revenue is believed to be growing rapidly and is expected to account for more than 30-40% of Meta's total ad revenue.

In 2023, Meta's overall revenue was reported at around US$116.6 billion, with ad revenue accounting for a large portion of that. Instagram, as one of the company's key platforms, is considered to be a major driver of this revenue, especially as the platform has expanded its advertising features, such as Stories, Reels, and Shopping.

Meta first acquired Instagram in 2012. In a press statement then, it said that the total consideration for San Francisco-based Instagram is approximately US$1 billion in a combination of cash and shares of Facebook. “We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience,” said Mark Zuckerberg, Facebook founder and CEO, during the acquisition.

Two years later, Facebook announced that it had reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately US$16 billion, including US$4 billion in cash and approximately US$12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp's founders and employees that will vest over four years subsequent to closing.

The acquisition supported Facebook and WhatsApp's shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. "WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Zuckerberg.

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