Meta Platforms Inc., previously known as Facebook, is under intensified scrutiny after allegations surfaced that the company withheld critical information from federal regulators during reviews of its Instagram and WhatsApp acquisitions. The accusations come as part of a lawsuit initiated by the US Federal Trade Commission (FTC), which seeks to dismantle the social media giant’s dominance.
The FTC initially reviewed Meta’s acquisition of Instagram in 2012 through an in-depth process and WhatsApp in a more cursory 30-day overview in 2014. Both deals were approved at the time, but the agency has since faced substantial criticism for allowing the transactions to proceed. The FTC filed a lawsuit in 2020 alleging that Meta had monopolized the personal social networking market by acquiring emerging competitors. Meta is currently attempting to have the case dismissed, arguing that the FTC’s position contradicts its earlier approval of the mergers and that the company has invested billions into the apps.
In a court filing made on Tuesday, the FTC disclosed that Meta did not provide all pertinent information during the original reviews. The agency now claims to have access to significantly more evidence, including pre-acquisition documents that were undisclosed in 2012 and 2014. According to the FTC, Meta requested only a limited review of the acquisitions at the time.
A Meta spokesperson, Chris Sgro, countered these claims by stating that the FTC has failed to produce substantive evidence supporting its allegations. Sgro argued that Meta’s investment in Instagram and WhatsApp has enhanced consumer experience, transforming the apps into widely used services that are offered for free.
The financial success of Instagram has been instrumental to Meta, contributing $16.5 billion in the first half of 2022 alone, nearly 30% of the company’s total revenue. Despite this, Meta has faced previous allegations of withholding information. In 2017, European antitrust regulators fined the company 110 million euros ($122.1 million) for providing misleading details about the WhatsApp acquisition.
The FTC has also criticized Meta for significantly increasing the ad load on Instagram and Facebook, and for depriving Instagram of necessary resources to innovate. The case, US Federal Trade Commission v. Facebook Inc., is being overseen by US District Judge James Boasberg in Washington, who has yet to rule on Meta’s request to dismiss the case or set a trial date.