March 2026
U.S. Court Holds That Meta’s Acquisitions of Instagram and WhatsApp Did Not Violate Antitrust Law
This case concerns allegations by the Federal Trade Commission (FTC) that Meta possessed monopoly power in the market for “personal social networking” (PSN) and unlawfully maintained that position through its acquisitions of Instagram and WhatsApp. Accordingly, in 2020, the FTC filed suit before the United States District Court for the District of Columbia, seeking a permanent injunction and equitable relief, including, inter alia, the divestiture of Instagram and WhatsApp.
In a judgment rendered on November 18, 2025, the Court rejected the FTC’s claims. The principal grounds are as follows:
1. Market Definition
The FTC defined the market as a “personal social networking” market limited to Facebook, Instagram, Snapchat, and MeWe. Meta, by contrast, contended that the market should be expanded to include at least TikTok and YouTube. The Court adopted Meta’s position.
Applying the Hypothetical-Monopolist Test (HMT), the Court found that, following TikTok’s entry into the United States, a substantial number of young adults shifted their time from Facebook and Instagram to TikTok. Meta’s internal studies likewise demonstrated that when users reduced their time on Meta’s applications, they most frequently shifted to YouTube, followed by TikTok. Moreover, when services were disrupted or banned, user time immediately migrated across platforms on a significant scale. On this basis, the Court concluded that consumers regard TikTok and YouTube as substitutes for Meta’s applications, and that the degree of substitution is substantial.
The Court further applied the standards set forth in Brown Shoe Co. v. United States, 370 U.S. 294 (1962), and determined that Facebook, Instagram, TikTok, and YouTube exhibit a high degree of convergence across multiple dimensions, including functions (AI-recommended video content and private messaging), industry recognition (both Meta and its competitors regard one another as direct competitors), core facilities (libraries of content, algorithms, and user bases), and customers and price (substantially overlapping user groups and zero-price services).
2. Monopoly Power
The Court held that, regardless of whether Meta may have possessed monopoly power in the relevant market in the past, the FTC’s enforcement authority is forward-facing and aimed at preventing conduct that is ongoing or about to occur. Accordingly, the FTC was required to demonstrate that Meta currently possesses monopoly power, rather than merely establishing past monopolization. The FTC failed to carry this burden.
After including TikTok and YouTube within the relevant market, the Court viewed that the best single measure of market share is total time spent. The Court found that Meta’s share constitutes only a modest share, well below the threshold for monopoly power recognized in precedent (70–75% market share). Furthermore, Meta’s market share has continued to decline in light of TikTok’s rise, reflecting the dynamic and competitive nature of the market. The Court, therefore, concluded that Meta does not possess monopoly power in the relevant market (i.e., the PSN market expanded to include TikTok and YouTube).
In its analysis of monopoly power, the Court articulated several noteworthy observations:
(1) Profits Exceeding Its Cost of Capital
The FTC argued that Meta’s persistent profits above the cost of capital may indeed suggest monopoly power. The Court, however, noted that high profits may also result from shrewd management, efficiency, or risky investments that hits big, and that the FTC failed to exclude these alternatives or to demonstrate that Meta’s profits are anomalous among successful technology firms. Moreover, as Meta’s original monopoly business (i.e., friend sharing contents) declined, its profits increased, thereby undermining the FTC’s position.
(2) Quality and Price
With respect to quality-adjusted price, the FTC contended that Meta effectively raised prices by increasing ad load and thereby degrading quality. The Court rejected this argument, finding that Meta’s overall product quality has continued to improve, including the introduction of features such as Reels and Stories, and that the relevance and quality of advertisements have also improved. The mere increase in advertising does not equate to a reduction in overall quality.
(3) Price Discrimination
As to price discrimination, the FTC argued that Meta’s practice of showing different quantities of advertisements to different users constitutes price discrimination. The Court held that price discrimination may demonstrate market power, but not monopoly power, as it is a ubiquitous phenomenon in competitive markets and therefore not a reliable indicator of monopolization.
3. Preliminary Observations
(1) The FTC has appealed this judgment, and further developments warrant close attention. [1]
(2) The Court adopted a dynamic approach to competition analysis. Rather than assessing market conditions at the time of Meta’s acquisitions of Instagram or WhatsApp, the Court evaluated conditions at the time the FTC initiated the action. Changes in market conditions—such as the rise of TikTok and YouTube and shifts in business models—naturally influenced the outcome. In addition, the Court’s treatment of supra-competitive profits, quality-adjusted price, and price discrimination provides useful reference points.
(3) Because the FTC did not prevail, the Court did not proceed to address divestiture. Nonetheless, whether dismantling a business that has been integrated for over a decade constitutes an effective remedy for restoring competition remains an open question. In particular, from the perspective of the integration of resources and technology within a corporate group, divestiture may not necessarily restore the pre-merger state or achieve the market conditions envisioned by regulators. This issue has been widely debated in recent years and merits continued observation.
[1] FTC Appeals Ruling in Meta Monopolization Case, Federal Trade Commission, available at:https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-appeals-ruling-meta-monopolization-case
In a judgment rendered on November 18, 2025, the Court rejected the FTC’s claims. The principal grounds are as follows:
1. Market Definition
The FTC defined the market as a “personal social networking” market limited to Facebook, Instagram, Snapchat, and MeWe. Meta, by contrast, contended that the market should be expanded to include at least TikTok and YouTube. The Court adopted Meta’s position.
Applying the Hypothetical-Monopolist Test (HMT), the Court found that, following TikTok’s entry into the United States, a substantial number of young adults shifted their time from Facebook and Instagram to TikTok. Meta’s internal studies likewise demonstrated that when users reduced their time on Meta’s applications, they most frequently shifted to YouTube, followed by TikTok. Moreover, when services were disrupted or banned, user time immediately migrated across platforms on a significant scale. On this basis, the Court concluded that consumers regard TikTok and YouTube as substitutes for Meta’s applications, and that the degree of substitution is substantial.
The Court further applied the standards set forth in Brown Shoe Co. v. United States, 370 U.S. 294 (1962), and determined that Facebook, Instagram, TikTok, and YouTube exhibit a high degree of convergence across multiple dimensions, including functions (AI-recommended video content and private messaging), industry recognition (both Meta and its competitors regard one another as direct competitors), core facilities (libraries of content, algorithms, and user bases), and customers and price (substantially overlapping user groups and zero-price services).
2. Monopoly Power
The Court held that, regardless of whether Meta may have possessed monopoly power in the relevant market in the past, the FTC’s enforcement authority is forward-facing and aimed at preventing conduct that is ongoing or about to occur. Accordingly, the FTC was required to demonstrate that Meta currently possesses monopoly power, rather than merely establishing past monopolization. The FTC failed to carry this burden.
After including TikTok and YouTube within the relevant market, the Court viewed that the best single measure of market share is total time spent. The Court found that Meta’s share constitutes only a modest share, well below the threshold for monopoly power recognized in precedent (70–75% market share). Furthermore, Meta’s market share has continued to decline in light of TikTok’s rise, reflecting the dynamic and competitive nature of the market. The Court, therefore, concluded that Meta does not possess monopoly power in the relevant market (i.e., the PSN market expanded to include TikTok and YouTube).
In its analysis of monopoly power, the Court articulated several noteworthy observations:
(1) Profits Exceeding Its Cost of Capital
The FTC argued that Meta’s persistent profits above the cost of capital may indeed suggest monopoly power. The Court, however, noted that high profits may also result from shrewd management, efficiency, or risky investments that hits big, and that the FTC failed to exclude these alternatives or to demonstrate that Meta’s profits are anomalous among successful technology firms. Moreover, as Meta’s original monopoly business (i.e., friend sharing contents) declined, its profits increased, thereby undermining the FTC’s position.
(2) Quality and Price
With respect to quality-adjusted price, the FTC contended that Meta effectively raised prices by increasing ad load and thereby degrading quality. The Court rejected this argument, finding that Meta’s overall product quality has continued to improve, including the introduction of features such as Reels and Stories, and that the relevance and quality of advertisements have also improved. The mere increase in advertising does not equate to a reduction in overall quality.
(3) Price Discrimination
As to price discrimination, the FTC argued that Meta’s practice of showing different quantities of advertisements to different users constitutes price discrimination. The Court held that price discrimination may demonstrate market power, but not monopoly power, as it is a ubiquitous phenomenon in competitive markets and therefore not a reliable indicator of monopolization.
3. Preliminary Observations
(1) The FTC has appealed this judgment, and further developments warrant close attention. [1]
(2) The Court adopted a dynamic approach to competition analysis. Rather than assessing market conditions at the time of Meta’s acquisitions of Instagram or WhatsApp, the Court evaluated conditions at the time the FTC initiated the action. Changes in market conditions—such as the rise of TikTok and YouTube and shifts in business models—naturally influenced the outcome. In addition, the Court’s treatment of supra-competitive profits, quality-adjusted price, and price discrimination provides useful reference points.
(3) Because the FTC did not prevail, the Court did not proceed to address divestiture. Nonetheless, whether dismantling a business that has been integrated for over a decade constitutes an effective remedy for restoring competition remains an open question. In particular, from the perspective of the integration of resources and technology within a corporate group, divestiture may not necessarily restore the pre-merger state or achieve the market conditions envisioned by regulators. This issue has been widely debated in recent years and merits continued observation.
[1] FTC Appeals Ruling in Meta Monopolization Case, Federal Trade Commission, available at:https://www.ftc.gov/news-events/news/press-releases/2026/01/ftc-appeals-ruling-meta-monopolization-case
