Mehta and the US Federal Trade Commission are expected to face this month in federal court. This will face off in the first big test of whether new Donald Trump-appointed anti-trust regulators will continue to crack down on big technology.
In the looming trial set on April 14, Mark Zuckerberg recently saw the US president meet in an apparent last minute lobbying attempt to avoid a court showdown.
The exam represents the most serious anti-trust challenge in meta history, with the $150 million tech giant being forced to unleash the acquisition of messaging platforms WhatsApp and Photo-Sharing App Instagram.
The case is also the first signal of how new FTC Chairman Andrew Ferguson, who has accused Big Tech of invading individual freedom, will approach an industry that is currently actively courting the White House.
Meta appears to be exploring a settlement with regulators ahead of time. It avoids a trial in which Zuckerberg, former Chief Operating Officer Sheryl Sandberg, Tiktok, Snap and Google’s YouTube rival leaders won the witness stand.
Zuckerberg attended regular White House meetings, including one on Wednesday, as part of an escalating push to curry favor with President Trump, seeking Meta’s positive outcome. The White House, Meta and the FTC all declined to comment on the meeting.
Former FTC Chairman Bill Kovacic noted that it would be more difficult to resolve cases that proposed structural relief such as disbandment than those that proposed money. However, “we can take steps to provide knowledge of other company data (and) about customers accumulated through ownership,” he said. “The appeal of a situation depends on what the meta offers.”
Zuckerberg’s efforts are strongly suggesting that the new FTC chair will stick to the hardline of big technology led by his predecessor, Lina Khan.
Ferguson is part of a new generation of populist Republicans who have accused them of accepting strict antitrust enforcement and censoring conservative voices, particularly the Silicon Valley giants. He promised to enforce competition laws “vigorously” and said “Trump Vance’s FTC will never step back from acquiring big technology.”
The FTC chair on Wednesday criticized him for thinking he had previously had a loose scrutiny of big technology and warned that the government has not addressed the risk of monopoly. “After that, you get caught up in a situation where MetaInstagram is,” he said at an event held by the startup incubator Y Combinator.
Silicon Valley hoped that Trump’s return to the White House would unlock deal-making, but the Meta case could be a powerful tool to stop anti-competitive takeovers.
The trial comes more than four years after the FTC first sued the then Flackbook, which allegedly maintained its illegal monopoly. Anti-trust regulators during Trump’s first presidency denounced the group for shattering early competition by buying rivals for $1 billion and $1.9 billion in 2012 and 2014, respectively, and urged the deal to be rewind.
This is important because it relates to the broader principle of deterring the dominant company from gobbling Pac-Man’s defenses (emerging rivals and recruitment),” said Bill Baer, former head of DOJ’s antitrust division.
The FTC claimed that Meta had a “systematic strategy” to curb competition. This includes a “purchase or compensate” approach of snapping rivals or cutting off services to those who are threatening their exclusivity.
Experts say Meta is expected to argue that it has supported the acquisition rather than filling the one that was already cleared by the FTC.
Several analysts said the judge, whose main side of James Boasberg, was skeptical of the FTC’s argument and first rejected the first complaint on the grounds that it was “legally inadequate” before accepting the 2022 revised case.
Boasberg, who primarily siding the lawsuit, injected fresh drama into the prominent lawsuit as Trump previously clashed with him after a judge temporarily blocked government measures that had sought to accelerate deportation.
Recommended
“The FTC is clearly climbing a difficult uphill, and the outcome of the incident will be an important lesson in whether general hostility towards big technology can be translated into compelling cases under the strict standards of the US anti-unit law, said Maureen Olhausen, former acting FTC chair.
As with Meta, rewinding transactions are generally complicated, especially if they were closed more than a decade ago, experts said.
The meta trial follows the crackdown on Big Tech, unleashed by progressive officials appointed by former US President Joe Biden, including former US President Kern, former FTC chairman, and former U.S. President Jonathan Kanter, former chief of the U.S. Department of Justice’s anti-trust division.
They secured a big victory in an online search last year that included a federal US judge who found Google to maintain an illegal monopoly, bringing it to trial for a meta monopoly case after its initial firing.
However, the FTC also suffered from several setbacks, including not halting Meta’s Virtual Reality Business acquisition and Microsoft’s purchase of the Video Games Company Activision Blizzard.
If the exam goes ahead and Meta is found guilty, the second phase determines a potential remedy. Citing the Trump administration’s recent attack on perceived enemies, a former senior official said, “It’s difficult to worry about whether or not you’ll follow the rule of law, not the law.”
“This is an opportunity for the FTC to reset,” said Paul Swanson, who leads antitrust and competitive practices at law firm Holland & Hart. “If they continue to make big swings and big mistakes, they lose some of their power and power in the corporate eye. They will benefit from victory here not only by challenging other markets, but also by challenging them.”
