By: Shuo Li
Introduction
Meta Platforms, Inc. (“Meta”) is a global technology holding company best known for operating Facebook, the largest social networking platform in the world.[1] As of November 2025, Facebook accounted for approximately 69% of the social media app market.[2] Through its website and mobile applications, Facebook enables users to communicate with friends and family and share opinions, ideas, photos, and videos.[3]
In addition to Facebook, Meta owns and operates several other major platforms, including the photo-sharing app Instagram, the text-based update app Threads, and the messaging apps Messenger and WhatsApp.[4] Meta also develops virtual-reality hardware, software, and a developer ecosystem through its Reality Labs division.[5]
Meta was initially founded in 2004 as The Facebook by Mark Zuckerberg and three classmates at Harvard University.[6] It became a publicly traded company in 2012.[7] For the trailing twelve-month period ending in September 2025, Meta reported $189.46 billion in revenue and $58.53 billion in net income.[8] As of December 26, 2025, the company had a market capitalization of approximately $1.68 trillion, making it one of the largest companies in the world.[9]
In 2012 and 2014, Meta acquired Instagram and WhatsApp for $19 billion, respectively.[10] On December 9, 2020, the Federal Trade Commission initiated an antitrust lawsuit against Meta, alleging that the company unlawfully maintained its monopoly in the personal social networking market through a sustained years-long pattern of anticompetitive conduct.[11] After years of litigation, the federal district court in the District of Columbia (“Court”) concluded that FTC failed to prove that Meta was monopolizing a “personal social networking” market through its acquisitions.[12]
What happened in the Case?
To start, the FTC’s authority sought injunctions from Section 13(b) of the FTC Act: “Whenever the Commission has reason to believe that any … corporation is violating, or is about to violate, any provision of law enforced by the Federal Trade Commission”, which includes antitrust laws, “the Commission . . . may bring suit in a district court of the United States to enjoin any such act or practice.”[13] As a result, the FTC could only seek to enjoin “conduct that currently violates the law or imminently will.”[14] This temporal element played a critical role in the decision, because “[w]hether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now.”[15]
To prove monopolization under the Sherman Act, the FTC must establish two elements: (1) Meta holds monopoly power in a market, and (2) Meta maintains the monopoly through anticompetitive conduct.[16] A company has monopoly power if “it could maximize its profit by charging a price substantially above what would prevail in a competitive market.”[17] The market definition provided by the FTC is a narrow “personal social networking” (“PSN”) market limited to Facebook, Instagram, Snapchat and MeWe, whereas Meta contends that PSN is not a separate market anymore, and Meta competes in the broader market of “social media”, including TikTok and YouTube.[18]
A: Direct Evidence
The FTC presented three categories of direct evidence to establish Meta’s monopoly power, including: (1) Meta had long earned profits that exceed its cost of capital;[19] (2) Meta had profitably raised the quality-adjusted price of its app, by degrading its apps’ qualities while maintaining the apps’ free price, thereby offering a worse product for the same price, which was equivalent to a price increase;[20] and (3) Meta engaged in price discrimination by charging a higher quality-adjusted price to a subset of users by showing them more advertisements.[21]
As to the first argument, the court acknowledged that high profits can suggest monopoly power.[22] However, high profits were also equally consistent with efficiency, innovation, risk-taking, and superior management.[23] Moreover, the FTC’s position was internally inconsistent by asserting that Meta’s monopoly lies in friends sharing, e.g., posting a picture to Instagram’s feed, because Meta’s business had shifted away from friend sharing toward unconnected video contents.[24] Under FTC’s theory, this shift would reduce Meta’s profit instead of sustaining them.[25] Accordingly, the court was unpersuaded by the profit-earning argument.[26]
Turning to FTC’s second argument, the agency argued that (1) more advertisements load reflects diminished product quality, indicating hidden price increase;[27] (2) the declination of user sentiment proves the declination of app quality;[28] and (3) the underinvestment in the friend and family content users wanted shows monopoly complacency by not listening to the users.[29]
The Court rejected each contention.[30] Firstly, the Court explained that ad load is only one dimension of product quality, and Meta’s ad quality has increased, because Meta did not increase ad load until ads had improved, so that the company could sell more ads without pushing users away from the apps.[31] What’s more, user sentiment surveys didn’t measure product quality, but instead, brand reputation, which was heavily influenced by news coverage.[32] Lastly, the Court concluded that the underinvestment theory makes no sense[33], because Reels (“short videos”) earn less money than friend content, meaning Meta was sacrificing short-term revenue to compete, which was a behavior contradicting monopoly exploitation.[34]
Finally, in addressing FTC’s price discrimination argument, the Court explains that price discrimination does not prove monopoly power, because price discrimination only reveals market power – “the power to price a good above marginal cost” – which essentially exists in every business.[35] Accordingly, none of the direct evidence presented by the FTC proves Meta’s monopoly.[36]
B: Indirect Evidence
To prove monopoly through indirect evidence, the FTC must show that Meta holds a dominant share in a market that is protected by barriers to entry.[37] To define a market, the market must include a product market and a geographic market.[38] Both parties agreed that the relevant geographic market is the United States.[39] The dispute, therefore, turns on the product market, which the Court defines as the set of products that consumers view as “reasonably interchangeable for the same purposes.”[40] As mentioned above, the FTC claims that Meta competes in the personal social networking (“PSN”) market, whereas Meta rejoins that Facebook and Instagram compete in a watching “unconnected videos” market, containing TikTok and YouTube.[41]
The leading method in deciding the product market is the hypothetical-monopolist test.[42] Precisely, the Court asks whether the hypothetical monopolist would profit after imposing a small but significant and non-transitory increase in price (SSNIP).[43] A common number for price increases is 5%.[44] To illustrate how the hypothetical monopolist test operates, consider a market where a single firm controls all pencil production.[45] If that hypothetical monopolist could profitably impose a small but significant price increase—approximately 5% above the competitive level—pencils would constitute a distinct relevant market.[46] If, however, such a price increase would be unprofitable because a substantial number of consumers would switch to pens, then pencils and pens would properly be treated as part of the same market.[47]
Two kinds of evidence were presented in front of the Court in deciding whether TikTok and YouTube are reasonably interchangeable with Meta’s apps, including observational data and experimental evidence.[48]
Firstly, observational evidence showed that when TikTok was introduced into the United States, Americans reallocated massive amounts of time from Facebook and Instagram to the new app.[49] More formal measurement of nearly 50,000 users confirmed that reductions in time spent on Facebook or Instagram most often flowed to YouTube and TikTok.[50] As a result, the evidence demonstrates that users consider TikTok and YouTube to be reasonably interchangeable with Meta’s apps.[51]
Second, experimental evidence reinforced this conclusion.[52] In a payment experiment where the testers paid less money to people who used Meta apps versus other apps, i.e., made Meta’s apps more costly to use, users disproportionately shifted their time to YouTube, TikTok, and Snapchat.[53] Natural experiments produced the same result in both directions, particularly when Meta’s apps went offline, users primarily turned to TikTok and YouTube, and when TikTok became unavailable in India or temporarily in the United States, users dramatically increased their time on Facebook and Instagram, in some cases by more than 60%.[54] Moreover, even a brief YouTube outage in 2018 led to a 6% spike in Facebook usage, underscoring competitive overlap.[55]
Taken together, the evidence showed not merely abstract competition, but economically significant substitution that forced Meta to invest “gobs of cash to keep up”, leading the Court to conclude that Meta is not insulated from competition.[56]
C: Assessing Monopoly
Finally, after the court decided that the product market at question comprises Facebook, Instagram, MeWe, Snapchat, TikTok, and YouTube,[57] the Court finished its analysis by assessing whether Meta possessed sufficient monopoly power within the market. As the more time someone spends on an app, the more ads can be shown to the person, and the more money will be made by the firm, the Court determined that time spent is the best proxy in deciding an app’s revenue.[58] As of 2025, Meta’s share of time spent comes out to around 30% of the market.[59] Even considering YouTube to be excluded from the Market, Meta’s share of time spent is only 54%.[60]
Considering the 4th and 5th Circuit Courts have opined that “the Supreme Court has never found a party with less than 75% market share to have monopoly power”[61] and “monopolization is rarely found when the defendant’s share of the relevant market is below 70%”,[62] the District Court of Columbia held that Meta’s share of the market, as a matter of law, does not establish monopoly power.[63]
Conclusion
FTC v. Meta sets an important benchmark for how courts will evaluate acquisitions by modern technology companies. This decision signals that scale alone—such as owning a large portfolio of products—is not sufficient to establish monopoly power. What matters instead is concentration within a properly defined product market. By that logic, a singular corporation may hold 50% of market power in every single market in the world without violating antitrust laws. Accordingly, the Court’s analysis suggests that future acquisitions by technology firms will generally survive antitrust scrutiny absent meaningful increases in market-specific concentration.
About the Author
Shuo Li is a second-year law student at Widener University Delaware Law School and a staff editor for the Delaware Journal of Corporate Law. His academic and professional interests include corporate law and personal injury litigations. Shuo has interned with the Civil Division of the Philadelphia Court of Common Pleas and externed with the Complex Commercial Litigation Division of the Delaware Superior Court, where he gained valuable experience in motion practices and courtroom proceedings.
[1] See Nathan Reiff, Top Facebook (Meta) Shareholders, Iɴᴠᴇꜱᴛᴏᴘᴇᴅɪᴀ (Dec. 26, 2025) [hereinafter Top Meta Shareholders], https://www.investopedia.com/articles/insights/082216/top-9-shareholders-facebook-fb.asp
[2] Id.
[3] Id.
[4] Id.
[5] Top Meta Shareholders, supra note 1.
[6] Id.
[7] Id.
[8] Id.
[9] Top Meta Shareholders, supra note 1.
[10] See Georgios Petropoulos, Geoffrey G. Parker & Marshall Van Alstyne, What the FTC v Meta Case Teaches About Big Tech Harms, PʀᴏMᴀʀᴋᴇᴛ (June 5, 2025), https://www.promarket.org/2025/06/05/what-the-ftc-v-meta-case-teaches-about-big-tech-harms/; see also The Story of Instagram’s $1 Billion Acquisition, Dᴇᴀʟᴍᴀᴋᴇʀꜱ, https://dealmakers.co.uk/the-story-of-instagrams-1billion-acquisition/ (last visited Mar. 16, 2026).
[11] Facebook, Inc., FTC v. (FTC v. Meta Platforms, Inc.), Fᴇᴅ. Tʀᴀᴅᴇ Cᴏᴍᴍ’ɴ, https://www.ftc.gov/legal-library/browse/cases-proceedings/191-0134-facebook-inc-ftc-v-ftc-v-meta-platforms-inc (last visited Mar. 3, 2026).
[12] See Joseph M. Rancour et al., FTC Loses Retroactive Merger Challenge as Court Concludes That Meta Is Not a Monopolist, Sᴋᴀᴅᴅᴇɴ (Nov. 24, 2025) [hereinafter Skadden Article], https://www.skadden.com/insights/publications/2025/11/ftc-loses-retroactive-merger-challenge
[13] 15 U.S.C. § 53(b); see also Fed. Trade Comm’n v. Meta Platforms, Inc., 2025 WL 3458822, at *11 (D.D.C. Dec. 2, 2025).
[14] Fed. Trade Comm’n, 2025 WL 3458822, at *11.
[15] Id. at *40; see also Skadden Article, supra note 10.
[16] Fed. Trade Comm’n, 2025 WL 3458822, at *10.
[17] Id. at *10.
[18] Id. at *1.
[19] Id. at *11.
[20] Fed. Trade Comm’n, 2025 WL 3458822, at *12.
[21] Id. at *16.
[22] Id. at *11.
[23] Id.
[24] Fed. Trade Comm’n, 2025 WL 3458822, at *12.
[25] Id. at *12.
[26] Id.
[27] Id. at *13.
[28] Fed. Trade Comm’n, 2025 WL 3458822, at *14.
[29] Id. at *15.
[30] Id. at *16.
[31] Id. at *13.
[32] Fed. Trade Comm’n, 2025 WL 3458822,at *14.
[33] Id. at *15.
[34] Id. at *16.
[35] Id.
[36] See generally Fed. Trade Comm’n, 2025 WL 3458822, at *10–16, 17.
[37] Id. at *17.
[38] Id.
[39] Id.
[40] Fed. Trade Comm’n, 2025 WL 3458822, at *17.
[41] Id.
[42] Id. at *18.
[43] Id. at *18.
[44] Fed. Trade Comm’n, 2025 WL 3458822, at *18.
[45] Id.
[46] Id.
[47] Id.
[48] Fed. Trade Comm’n, 2025 WL 3458822, at *19.
[49] Id.
[50] Id. at *20.
[51] Id. at *19.
[52] Fed. Trade Comm’n, 2025 WL 3458822,at *21.
[53] Id. at *21–22.
[54] Id. at *22–23.
[55] Id. at *24.
[56] Fed. Trade Comm’n, 2025 WL 3458822, at *26.
[57] Id. at *36.
[58] Id. at *37.
[59] Id. at *38.
[60] Fed. Trade Comm’n, 2025 WL 3458822, at *37.
[61] Id. at *38 (quoting Kolon Indus. Inc. v. E.I. DuPont de Nemours & Co. (Kolon II), 748 F.3d 160, 174 (4th Cir. 2014)).
[62] Id. (quoting Exxon Corp. v. Berwick Bay Real Estate Partners, 748 F.2d 937, 940 (5th Cir. 1984)).
[63] Id. at *38.
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