Explained: Why Mark Zuckerberg may be forced to sell Instagram and WhatsApp

Mark Zuckerberg began testifying in a Washington federal court on Monday (April 14) in a landmark antitrust suit by the US government against his company Meta Platforms.

Zuckerberg is the co-founder and chairman, chief executive officer, and controlling shareholder of Meta Platforms (parent company of Facebook, WhatsApp, Instagram).

What is the lawsuit about?

The Federal Trade Commission (FTC), a powerful consumer protection agency in the US, is accusing the social media giant of abusing its market power to acquire Instagram and WhatsApp before they could become competitors.

“They decided that competition is too hard and it would be easier to buy out their rivals than to compete with them,” said Daniel Matheson, an FTC lawyer in his opening remarks at the anti-trust trial.

The FTC shared an email from Zuckerberg before Facebook acquired Instagram in 2012. In the email, Zuckerberg said Instagram’s emergence was “really scary”, and “that is why we might want to consider paying a lot of money for this”.

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Subsequently, Facebook purchased Instagram, which was then a small photo-sharing app but one which seemed to have a lot of potential for growth, for a billion dollars.

Meta then acquired WhatsApp in 2014 for $19 billion. The FTC attorneys argue that it was the same rationale that made Meta buy the messaging app, because it feared that it could transform into a social network or be bought by one of Meta’s competitors.

The FTC further argues the monopoly power that Meta enjoys is shown by a user experience that is vastly downgraded, with too many advertisements and product changes that users can do nothing about.

What is Meta’s defence?

Meta’s lawyer Mark Hansen argued before the court that acquisitions to improve and grow an acquired firm are not unlawful in the US, and that is what Meta (Facebook) did.

Meta’s team of attorneys will argue that it was the substantial investments by Meta in Instagram and WhatsApp after their acquisition that transformed them into what they are today – both with a huge base of two billion active users each, and WhatsApp being ranked as the most-used mobile messenger app in the world.

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Meta, in its defence, will also highlight the fact that its apps are free for users, and that they face fierce competition.

What is at stake for Meta?

The social media juggernaut may be forced to divest WhatsApp and Instagram if the court rules that it is in the best interests of consumers.

Meta stands to lose a great deal after investing billions to acquire and then to grow the two apps that have become global powerhouses. Of course, it could recoup some of its investments if it manages to get a good price for the apps, if it is forced to divest.

Has Zuckerberg been lying idle?

Zuckerberg is no stranger to lawsuits. In 2004, he was sued by the Winklevoss twins Cameron and Tyler and Divya Narendra, accusing him of making them believe he would help them build a social network called HarvardConnection.com. He has faced several other lawsuits over the years.

The present case against Meta was first filed in December 2020, during Trump’s first term as President.

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After Trump took over as President for his second term, Zuckerberg has made several visits to the White House in efforts to convince Trump’s administration to go for a settlement in the case rather than a trial. The Meta owner contributed to Trump’s inauguration fund, and has modified content moderation policies in Meta’s apps.

Zuckerberg has even purchased a $23 million mansion in Washington that allows him to spend more time in the US capital to lobby with the administration.

Is this the only antitrust case?

The Meta lawsuit is not the only antitrust case being fought in US courts.

There are four other major tech antitrust suits that have been filed by the US government. The search giant Google is fighting two cases, and was even found guilty of search-market dominance abuse in August 2024.

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Apple and Amazon are also facing antitrust lawsuits.

What may be the clincher?

The FTC is arguing that Facebook and Instagram are dominant players in apps that provide a way for people to connect with family and friends. This category does not include YouTube and TikTok.

Meta argues to the contrary, and promises to share evidence during the trial that will show “what every 17-year-old in the world knows: Instagram, Facebook, and WhatsApp compete with Chinese-owned TikTok, with YouTube, X (owned by Elon Musk), iMessage, and several other apps.

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What can probably help Meta win the case is to show the court that it is competing in a much bigger market than the FTC is making it out to be.