To the surprise of many, the Federal Trade Commission and Justice Department’s Antitrust Division under President Trump are enthusiastically revamping Biden-era antitrust enforcement—now rebranded “America First Antitrust”—as a reassertion of progressive policy in conservative drag.
But America First Antitrust may not survive contact with judicial reality. The bench trial in the FTC’s case against Meta, owner of Facebook, Instagram, and WhatsApp, wrapped up this week. While I won’t presume to predict the outcome, the problem for the FTC in its antitrust case against Meta is not to be found in the evidence it presented. It is in the utter lack of evidence that Meta is a monopolist.
We can only hope that if a federal judge in Washington, D.C., rules against the government, such a loss for FTC Chairman Andrew Ferguson—a former Virginia Solicitor General who takes pride in his skill as a litigator—might make him rethink the direction he’s taken. It was Ferguson who shocked conservatives by joining with DOJ Antitrust Chief Gail Slater in accepting without change the Biden Administration’s joint merger guidelines that are a blueprint for government intervention in the economy.
How bad are those guidelines? One detail tells it all. The Biden (now Trump) merger guidelines rely heavily on a 1962 case called Brown Shoe, in which the Supreme Court blocked the merger of two U.S. shoemakers who had 4 percent and 0.5 percent of the American shoe market, respectively. The absurdity of this precedent prompted courts to set it aside for 50 years. The continued guidelines not only revive Brown Shoe, but they also fail to even mention the consumer welfare standard that has guided courts since 1979 in applying economics to antitrust law.
Now the FTC is on thin ice with a string of rhetorical—not economic—arguments against Meta, a case brought in the first Trump administration but now laden with the claims of Biden regulators.
The heart of the FTC’s case is that Meta’s acquisition of Instagram and WhatsApp more than a decade ago allowed it to become a monopolist. But in which market? The FTC charges that Meta is a monopoly in what the agency defines as the “personal social networking services” (PSNS) market. The FTC had to gerrymander this market in a way that leaves out the most potent competitors to Facebook and Instagram—TikTok, X, YouTube, and Snapchat.
When the FTC allowed Meta to acquire Instagram in 2012, Instagram was a picture-sharing app with 13 employees that had only two percent of the users it has today. Meta’s investments built out Instagram to include direct messaging, live video streaming, and shopping. Now, Instagram is used by about 200 million Americans. The FTC argues that without the acquisition, Instagram’s 13 employees would have done at least as well and would have brought more competition to the PSNS market. If some scientists are correct and there is a multiverse, perhaps one day we can fact-check that assertion. In the meantime, the FTC offers rank, unfounded speculation.
Meta similarly juiced up WhatsApp after acquiring it in 2014. Meta dropped WhatsApp’s subscription and added video calling and privacy-enhancing end-to-end encryption. Those were consumer-friendly innovations. Isn’t that what antitrust enforcement is supposed to promote?
Overlooked is how Facebook itself has evolved from a colorful message board for friends and family into a robust entertainment platform that now receives only 20 percent of its content from “friends.” When the FTC asserted that Meta’s products were different because they were centered around friends and sharing, the federal judge asked an FTC witness, “Why aren’t the ways these are used now just a difference in degree?”
In trying to argue that a free service is a monopoly, the FTC argues that Meta rips off consumers by showing them too many ads. This, too, is purely subjective. Meta, which earns nothing when it posts ads that users don’t click, has every incentive to be disciplined in its deployment of ads.
The FTC allowed these acquisitions to go forward more than a decade ago. If the FTC wins, it will send a message that no deals are final: You are always in the thrall of government. Worst of all, an FTC victory would discourage companies from investing billions of dollars in innovation and improvement to the benefit of consumers. The welfare of the consumer may remain jettisoned by America First Antitrusters in their guidelines, but judge after judge has shown that it is still very much top of mind for the courts.
This case should be understood in the context of conservatives carrying a grudge against Meta for its Biden-era (actually Biden Administration-imposed) censorship. But if the FTC were to prevail on such a flimsy case, it would put every large business, and thus capitalism itself, under the thumb of the biggest monopolist of all—the one in Washington, D.C.
Robert H. Bork Jr. is president of the Antitrust Education Project.