Ben Woollams has been following the latest news on the META anti trust lawsuit…
In one of the first real legal challenges to a dominant big tech player Meta is facing an anti trust lawsuit from the FTC in the US. If successful Meta would be forced to divest Instagram and Whatsapp
What are the implications for advertisers?
Facebook and Instagram are deeply intertwined in Meta’s advertising platform and the majority of advertising through the company functions as a network buy. There would need to be substantial redevelopment to split these into separate advertising entities meaning that advertising through Meta may become unavailable for an indeterminate amount of time. Once advertising is reinstated the performance for both channels will likely degrade notably, as there will be lower pools of users and data matching available. Whether the tech updates that have been rolled out in the platform over the years would remain available in both Facebook and Instagram as separate entities is also unclear.
In terms of buying strategy Facebook and Instagram would need to be allocated separate budgets. It is likely going forward that Instagram would be used for brands relevant to younger audiences while Facebook skews older.
How likely is this to actually happen?
Extremely unlikely in my opinion, for a handful of reasons. The FTC is theoretically working independently from Trump, but in reality he has the capacity to derail it entirely. Trump has shown favouritism to social media companies on a number of occasions, including extending TikTok’s deadline to find a buyer multiple times and giving X owner, Elon Musk, free reign over government spending. In the previous administration there was notable tension between Trump and Meta, based on Meta’s fact-checking policies and banning of Trump allies from the platform. However the two appear to be much closer now with Zuckerberg donating significant sums to Trumps inaugural fund and removing Meta’s fact checking in an apparent bending of the knee. Zuckerberg was since invited to Trumps inauguration and is reportedly appealing to him personally to have the suit dropped.
Even assuming the suit proceeds to trial it remains unlikely to succeed. The FTC is tasked with proving that Meta holds a monopoly on a very narrow definition of their apps services, suggesting that X & Tiktok do not constitute meaningful competition in this space. The FTC recently failed to block a $68B acquisition by Microsoft of gaming giant Activision on anti-trust grounds, and will likely face even more stringent resistance from Meta lawyers in this case.
