Summary

• In December 2020, the FTC sued Meta, alleging that Meta held a monopoly in the market for personal social networking and had illegally maintained that monopoly through a years-long course of anticompetitive conduct that included acquiring Instagram in 2012 and WhatsApp in 2014.
• On November 18, 2025, following a six-week bench trial, U.S. District Judge James E. Boasberg found that the FTC had failed to prove that Meta currently holds a monopoly in personal social networking, regardless of whether Meta may have held monopoly power at the time of those acquisitions in 2012 and 2014. Finding ample evidence that Meta now competes with TikTok and YouTube, in part due to the evolution of Meta’s own platforms to focus on algorithm-suggested videos in place of friend posts, the court concluded that the FTC’s proposed market definition of personal social networking—comprised of just Facebook, Instagram, Snapchat, and minor player MeWe—was unduly narrow. Under an expanded market that includes TikTok and YouTube, Meta did not hold monopoly power.
• The decision is a significant loss for the FTC in a case that has spanned three administrations and has been cited as a prominent example of efforts to challenge the influence of large technology platforms. It also brings to a close a rare challenge to two mergers that the FTC had allowed to close more than a decade ago, and spotlights the challenges that regulators may face in bringing enforcement actions where significant time has passed and the industry is rapidly evolving.

Background

In December 2020, the FTC sued Meta Platforms, Inc. (formerly Facebook, Inc.) alleging that Meta had a monopoly in the market for personal social networking and that it had illegally maintained that monopoly by acquiring Instagram in 2012 and WhatsApp in 2014. The FTC alleged that Meta had viewed Instagram and WhatsApp as emerging competitive threats and decided to acquire both companies as part of its broader “buy or bury” strategy to eliminate competitors to Meta’s own business. The FTC alleged that Meta further insulated itself from competition by imposing anticompetitive conditions on third-party software developers on its platform that prevented them from becoming competitive threats. The FTC sought, among other remedies, the breakup of Facebook, Instagram, and WhatsApp into separate companies. After the court granted a motion to dismiss the FTC’s original complaint,[1] the FTC filed an amended complaint in 2021, which the court allowed to proceed.[2] Following additional pre-trial motions and discovery, a bench trial was held before Judge Boasberg in the spring of 2025. On November 18, 2025, the court issued its post-trial decision.

The Court’s Decision

Timeframe

The time period applied by the court when analyzing Meta’s alleged monopoly power was a critical determinant of the outcome of the case. Could the FTC prevail by showing that Meta was a monopolist in 2012 and 2014 when it acquired Instagram and WhatsApp, or did the FTC have to show that Meta currently possesses monopoly power? The court found that the current timeframe governs. Section 13(b) of the FTC Act allows the FTC to seek permanent injunctions when it “has reason to believe that any . . . corporation is violating, or is about to violate,” the antitrust laws.[3] Because “Section 13(b) serves a . . . forward facing role,” the court held that the “FTC can therefore seek to enjoin only conduct that currently violates that law or imminently will.”[4] The FTC thus had to show that “Meta has monopoly power now.”[5]

As the court described, from the time when Meta made the Instagram and WhatsApp acquisitions to the present, competitive dynamics have evolved significantly. Over the last decade, Meta’s focus has shifted from connecting users to friends and family to providing algorithm-generated recommendations for content created by strangers (particularly videos).[6] TikTok and YouTube were at the forefront of this change, and important drivers of Meta’s evolution.[7] TikTok pioneered the now-ubiquitous format that shows users short video content based on their interests. YouTube, a longtime supplier of user-generated video content, expanded into short-form video, as did Meta.[8] In light of this rapid evolution, the court observed that the FTC faced “an uphill battle”[9] to establish that Meta is a monopolist in a separate market for personal social networking apps that excludes TikTok and YouTube.

Direct Evidence of Monopoly

The court first considered direct evidence of monopoly put forward by the FTC to show that Meta was in fact charging more than the competitive price.[10] The FTC offered three categories of direct evidence: Meta’s high profits, an alleged increase in the quality-adjusted price for Meta’s products, and price discrimination. The court found that each type of evidence was insufficient to show that Meta held a monopoly. The court first observed that high returns alone do not indicate monopoly power. The court found that the FTC had failed to foreclose alternative explanations for Meta’s high profits, including “impressive technology that helps advertisers create engaging ads and target them to exactly the right users,” and that the FTC “did not even show that Meta’s profits are greater than other successful tech firms.”[11] Second, the court disagreed that Meta had increased the “quality-adjusted price” of its products—effectively an argument that Meta had decreased the quality of its products, since their nominal price is zero. The court credited evidence that an increase in ad load corresponded to an increase in product quality allowing Meta to show more ads, and that declining user sentiment reflected negative perceptions of the company brand rather than product quality.[12] The court found it not “credible that users would prefer the Facebook or Instagram apps that existed ten years ago to the versions that exist today.”[13]Finally, the court rejected the FTC’s argument that engaging in price discrimination proved monopoly power. Rather, “price discrimination reveals only what economists call market power,” noting a consensus that almost all companies have some degree of market power that may afford room for price discrimination (e.g., airline ticket prices, senior movie tickets), that typically falls short of monopoly power.[14]

Indirect Evidence of Monopoly

The court also declined to credit the FTC’s indirect evidence of monopoly—i.e., that Meta has a dominant share of a market protected by barriers to entry. To establish “a dominant share of the market,” the court had to define what market Meta competes in. The court found that the FTC’s proposed market definition of personal social networking services did not align with the current market realities, and that TikTok and YouTube are regarded by customers as reasonable substitutes for Meta’s products and therefore are appropriately included in the market. Within this broader market, the court ruled that Meta did not hold monopoly power.

Market Definition

The FTC alleged that Meta competes in a market for personal social networking apps that “people use to keep up with their friends and family.”[15] Meta asserted that consumers treat additional apps, most importantly TikTok and YouTube, as substitutes for Facebook and Instagram. Based on empirical evidence and the Brown Shoe factors, the court decided in favor of the broader market definition proposed by Meta. The court also rejected a submarket proposed by the FTC of customers focused on friend sharing.

Empirical Evidence. The court determined that empirical evidence “resoundingly showed” that consumers viewed TikTok and YouTube as “substitutes” for Facebook and Instagram.[16] The evidence consisted of a variety of forms of both observational and experimental data showing that consumers regularly switch among Facebook, Instagram, TikTok, and YouTube. For example, when TikTok entered the United States, data reflected that both Facebook and Instagram experienced a drop in the amount of time users spent on their platforms.[17] In addition, when TikTok was shut down for half of a day in January 2025, consumers shifted to Facebook, Instagram, and YouTube.[18] The pattern held for YouTube as well.[19] The court summarized the evidence: “When consumers cannot use Facebook and Instagram, they turn first to TikTok and YouTube. When they cannot use TikTok or YouTube, they turn to Facebook and Instagram.”[20] Overall, the court concluded that the level of customer substitution with TikTok and YouTube made clear that they are competitive constraints on Meta’s products.

Brown Shoe. The court found that a qualitative analysis of the factors from Brown Shoe Co. v. United States[21]—peculiar characteristics and uses; industry or public recognition; unique production facilities; and distinct customers, prices, and sensitivity to price changes—likewise indicated that the four apps should be considered part of a single product market.[22] The court found that, although Facebook, Instagram, and Snapchat “certainly show some distinct markings, they mostly resemble” TikTok and YouTube.[23] They all curate short videos and allow users to share those videos with one another through direct messages.[24] The evidence showed that industry insiders regarded the apps as competing with one another.[25] With respect to unique production facilities, the court found that TikTok or YouTube would not need to spend much at all to manufacture their own version of Facebook or Instagram.[26] Finally, the customer population of the apps are not distinct, and “most customers of each app are also customers of all the others.”[27] And the apps each have a price of zero.[28] The Brown Shoe factors thus confirmed what the empirical data demonstrated.

Customer Submarket. Finally, the FTC argued that TikTok and YouTube are not substitutes for a certain “subset” of users that “care[] especially about friend sharing.”[29] The court expressed skepticism regarding the FTC’s legal theory—which echoed the decision in FTC v. Whole Foods Mkt., Inc.,[30] that a subset of customers preferred premium organic supermarkets to conventional grocery stores—noting that it had not been endorsed by a majority of the D.C. Circuit panel that decided the case.[31] But the court found it unnecessary to resolve the issue, finding that the submarket failed as a factual matter because Meta could not realistically, and does not in fact, charge that subset of customers a higher quality-adjusted price.[32]

Monopoly Power

Based on the broader market definition incorporating TikTok and YouTube, the court analyzed Meta’s market share based on time spent on apps and by total number of users. The court found that “[a]s a matter of law, [Meta’s] modest share cannot establish monopoly power.”[33] Although the market share figures in the currently available decision are redacted, accompanying case discussion indicates Meta’s share of that broader market is less than 33%.[34]

Because the FTC failed to show that Meta holds a monopoly in the relevant market, the court did not reach the issue of whether Meta’s acquisitions of Instagram or WhatsApp, or any other behavior, constituted illegal maintenance of a monopoly.

Implications

The decision represents a significant loss for the FTC in a highly publicized enforcement action, occurring in the context of an increase in government scrutiny of the major technology platforms. The outcome is likely to contribute to further discussion of the FTC’s mixed record in recent enforcement actions.

The case was also notable because it challenged acquisitions that closed over a decade ago, after having been reviewed and cleared by the FTC.[35] While the circumstances of this case are in many respects unique, the decision demonstrates the challenges the agencies face when they bring an enforcement action seeking to unwind years-old mergers, particularly in situations where the industry or products at issue are rapidly evolving. The government faced a similar difficulty in the recent Google search litigation, where the rise of generative artificial intelligence played an important role in the court’s remedies order rejecting the government’s demand that Google be required to sell its Chrome browser.[36]

Finally, from the trial practice perspective, the court’s decision confirms the persuasiveness of empirical evidence to the analysis of market definition. The size and consistency of the data that Meta was able to produce regarding consumer substitution between Meta’s products and those of its competitors appeared particularly persuasive to the court. While the court declined to credit the FTC’s evidence of a decline in “quality-adjusted price,” the court appeared to accept the construct, showing how the hypothetical monopolist test may apply to markets where the price of the good is $0 and indicating that declines in product quality may serve as direct evidence of monopoly. For technology companies that rely on advertising as a sole source of revenue, this latter point is particularly important.

ENDNOTES

[1] FTC v. Facebook, Inc., 560 F. Supp. 3d 1, 4-5 (D.D.C. 2021).

[2] FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 40-41 (D.D.C. 2022).

[3] FTC v. Meta Platforms, Inc., No. 20-3590, slip op. 23 (D.D.C. Nov. 18, 2025).

[4] Id.

[5] Id. at 24.

[6] Id. at 8-10.

[7] Id. at 13.

[8] Id. at 14-16.

[9] Id. at 2.

[10] Id.

[11] Id. at 25-26.

[12] Id. at 26-31.

[13] Id. at 27.

[14] Id. at 35.

[15] Id. at 36.

[16] Id. at 40.

[17] Id. at 42-43.

[18] Id. at 50-52.

[19] Id. at 47, 52.

[20] Id. at 52.

[21] 370 U.S. 294 (1962).

[22] Meta, No. 20-3590 at 62.

[23] Id. at 76.

[24] Id.

[25] Id. at 70-74.

[26] Id. at 74-75.

[27] Id. at 75.

[28] Id. at 76.

[29] Id. at 77.

[30] 548 F.3d 1028, 1041 (D.C. Cir. 2008).

[31] Meta, No. 20-3590 at 77.

[32] Id. at 77-81.

[33] Id. at 85.

[34] Id.

[35] Id. at 20.

[36] United States v. Google LLC, 2025 WL 2523010, at *48-50 (D.D.C. Sep. 2, 2025).

This post is based on the Sullivan & Cromwell LLP memorandum, “Meta Prevails in FTC’s Antitrust Case Challenging Instagram and WhatsApp Acquisitions,” dated December 3, 2025, and available here.