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A federal judge has handed a major legal triumph to Meta Platforms, Inc. (NASDAQ:META), the parent company of Facebook, officially rejecting government accusations that the tech giant maintains an illegal monopoly on personal social networking.
The ruling, delivered Tuesday, brings a decisive end to a seven-month trial where regulators sought to unwind the corporation's past deals for WhatsApp and Instagram.
Judge James Boasberg grounded his decision largely on the drastic evolution of the online landscape, according to CNBC.
He highlighted that video-centric platforms, specifically YouTube and TikTok, now serve as direct substitutes for services provided by the defendant. Because consumers are shifting their time toward these competitors, the court found that the social media giant is compelled to spend heavily just to remain relevant.
"While each of Meta's empirical showings can be quibbled with, they all tell a consistent story: people treat TikTok and YouTube as substitutes for Facebook and Instagram, and the amount of competitive overlap is economically important," Boasberg wrote.
"Against that unmistakable pattern, the FTC offers no empirical evidence of substitution whatsoever," he added.
Due to the robust market rivalry, the District Court in Washington, D.C., ruled that the Federal Trade Commission failed to validate its central premise. The government could not demonstrate that the tech conglomerate currently maintains illegal dominance.
"Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now," Boasberg said in the filing. "The Court's verdict today determines that the FTC has not done so. A judgment so stating shall issue this day."
The ruling concludes a lawsuit originally launched five years ago. Regulators sought to force the divestiture of WhatsApp, acquired in 2014, and Instagram, bought in 2012, arguing those mergers stifled consumer alternatives for connecting with friends and family.
The path to this verdict was rocky. Boasberg initially threw out the complaint in 2021, noting a lack of proof regarding “market power.”
However, after the agency filed an amended version detailing metrics against defunct rivals like Google+ and Myspace, the trial proceeded. It eventually featured testimony from top executives, including Mark Zuckerberg and former COO Sheryl Sandberg.
Meta released a statement celebrating the outcome following the release of the memorandum opinion on Tuesday.
"The Court's decision today recognizes that Meta faces fierce competition," the company 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."
META Price Action: Meta Platforms shares were up 0.12% at $602.71 at the time of publication on Tuesday, according to Benzinga Pro data.
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Posted In: META
