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Alerts and Updates

FTC Fails to Establish That Social Media Company Has Monopoly Power

November 20, 2025

FTC Fails to Establish That Social Media Company Has Monopoly Power

November 20, 2025

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This decision illustrates the difficulty in challenging long-closed transactions, especially in fast-evolving digital markets.

On November 18, 2025, after five years of litigation, the United States District Court for the District of Columbia entered judgment in favor of Meta and against the Federal Trade Commission (FTC) in its lawsuit alleging that Meta held and illegally maintained monopoly power in personal social networking through its acquisitions of Instagram and WhatsApp. The decision followed a six-week bench trial that included testimony from high-ranking Meta executives, including Chief Executive Officer Mark Zuckerberg.

Key Takeaways

  • Market definition is the key battleground in conduct and merger antitrust litigation.
  • Modern markets are rapidly changing and competition is increasingly dynamic, making it harder to define markets for alleged antitrust violations.
  • Courts demand rigorous economic evidence of ongoing market power and anticompetitive effects, not theoretical concerns or qualitative narratives, which is harder to substantiate in zero-price digital markets.
  • Businesses should document changing market dynamics and competitive constraints and be prepared to aggressively attack narrow market definitions with empirical evidence.

Litigation Background

In 2020, the FTC sought permanent injunctive relief under Section 13(b) of the FTC Act, alleging that Meta’s acquisitions of Instagram (2012) and WhatsApp (2014) were part of a long-term “buy or bury” strategy aimed at eliminating nascent competitors and maintaining monopoly power in the personal social networking market under Section 2 of the Sherman Act. The court dismissed the FTC’s initial complaint in 2021 for failing to plead sufficient facts but allowed the agency to amend. The FTC responded with a substantially expanded amended complaint, which survived a motion to dismiss. The case then proceeded through discovery and ultimately to a six-week bench trial in April 2025.

To succeed on its claim, the FTC needed to prove that Meta’s acquisitions of Instagram and WhatsApp violate Section 2 or will do so imminently. To establish this, the FTC argued that there is a distinct market for personal social networking that includes friend-centric applications like Facebook, Instagram, Snapchat and MeWe, but excludes TikTok and YouTube. According to the FTC, Facebook has had a dominant market share in this market and has achieved higher profits and introduced more advertisements as a result.

The court rejected the FTC’s case because, while a personal social networking market may have existed in 2012-2014 when those acquisitions occurred or in 2020 when the case was filed, empirical evidence showed that in 2025 fewer and fewer users were consuming Facebook and Instagram for friend-centric content and that the vast majority were using them to consume algorithmically recommended short-form videos. In this new marketplace, the court found that Facebook and Instagram compete with TikTok and YouTube head-to-head for users’ time, attention and advertising, and that WhatsApp is not competing in this market at all. Given these changing consumer behaviors and competition from additional rivals, the court found that Meta is not violating Section 2 of the Sherman Act.

Practical Considerations

Retrospective Challenges Face Steep Hurdles

This decision illustrates the difficulty in challenging long-closed transactions, especially in fast-evolving digital markets. Clients with legacy acquisitions that could raise monopolization concerns should still maintain well-documented procompetitive justifications for those deals, but courts are more likely to focus on current market conditions rather than alleged historical dominance.

Market Definition Is the Critical Battleground

Enforcers and private plaintiffs often allege narrow antitrust markets in which the defendant holds a significant share. Here, the court’s decision underscores that static, narrow product-market definitions (e.g., distinguishing “personal social networking” from “video entertainment”) are vulnerable under current market conditions, where consumer behavior and product functionality change rapidly. Parties should be prepared to defend their conduct with current empirical evidence.

Ongoing Risk Remains, but Structural Relief May Be Less Likely

The decision highlights the difficulty of establishing current or imminently likely anticompetitive conduct under the FTC Act. Nonetheless, federal and state antitrust enforcers will continue to actively enforce potentially problematic transactions. Parties should actively document market realities, including emerging and adjacent competition, invest in empirical measurements that establish rivals’ ability to constrain pricing, quality and product development decisions, and be prepared to aggressively challenge narrow market definitions.

For More Information

If you have any questions about this Alert, please contact Sean P. McConnell, Christopher H. Casey, Alek Smolij, Nina Kalandadze, any of the attorneys in our Antitrust and Competition or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.