[ad_1]
A landmark antitrust trial that could reshape how big tech companies in the U.S. operate, on Monday, Mark Zuckerberg’s Meta Platform Inc. The case could lead Facebook owners to divest their Instagram and WhatsApp platforms, which will be unfolding in court in Washington, D.C. in the coming weeks. It’s the danger of the tech giant and what it might mean for businesses and operations in the U.S. and around the world.
Why did Yuan need to be judged?
In December 2020, the Federal Trade Commission and 48 state attorneys general filed an antitrust lawsuit against Facebook – the company is known to accuse the company of illegal, anti-competitive behavior.
“For nearly a decade, Facebook has used its strengths and monopoly power to crush smaller competitors and snuff races, all at the expense of everyday users. We are taking action to support millions of consumers and many small businesses that have been harmed by Facebook’s illegal behavior,” Letitia James, a New York State attorney, New York State Law Firm’s investigation.
The lawsuits were on Facebook’s $1 billion acquisition of Instagram in 2012 and bought WhatsApp’s $19 billion purchase two years later. The FTC accuses Facebook of failing to compete with new innovators in the mobile app market, saying it “when their popularity becomes an existential threat, it illegally buys or buries them.”
During the trial, the FTC will try to prove that Facebook maintains a monopoly in the social networking space, which has evolved with the rise of new entrants such as Short Video App Tiktok. It will try to prove that Facebook’s Instagram and WhatsApp bought Quashed’s competition, which the company then used its market advantage to unfairly inflate ad prices and deteriorate users’ data privacy rights.
What do you say about Yuan?
According to Yuan’s attorney Mark Hansen, the FTC’s lawsuit against META is “misleading.” Meta’s main defense is trying to determine that the FTC’s definition of the social media app market is too restrictive and failing to include key competitors such as Alphabet Inc.’s YouTube and Bytedance Ltd.’s Tiktok. Mehta also believes that the committee cannot prove that consumers and advertisers in the U.S. would get worse due to its acquisition and believes it improves the startups it purchased. “Anyway, consumers are the biggest winners,” Hansen said.
What are the risks of the company?
The company’s control is its control over photo-sharing app Instagram and messaging platform WhatsApp, each with over 2 billion active users. The FTC said Facebook must divest both businesses to restore competition.
Yuan is not only a social media company. It has invested at least $165 billion in artificial intelligence (AI) and immersive reality programs to consolidate its position as a serious deep technology player.
But its lucrative advertising business (Instagram) is the main money-maker. According to market intelligence firm Emarker, Instagram this year is expected to earn $32 billion in U.S. advertising revenue for META, accounting for half of the company’s advertising revenue. Emarketer said Instagram’s U.S. user base has soared to 148 million users over the past decade.
Will other countries follow suit?
Meta has found itself in the crosshairs of our and global regulators in recent years.
The EU, in particular, has put forward tough stances on large technologies to limit the market capabilities and influence of US technology companies. The European Commission began investigating last year whether Meta and Apple Inc. violated EU digital competition rules. The EU’s Digital Markets Act (DMA) came into effect in May 2023 and has developed guidelines for large tech companies to create a more equitable market and provide more options for European consumers.
The EU will announce its verdict in the coming weeks, with antitrust observers expecting Brussels to fine the two companies for regulatory violations. Trump’s trade war has further boosted the EU, with EU President Ursula von der Leyen pointing out that the group could fine U.S. tech companies if trade talks break down.
Did Meta win Trump?
Meta’s antitrust trial will be the first major test of the second Trump administration. The FTC’s case against META began in 2020, during the first term of U.S. President Donald Trump.
The U.S. president has threatened to sentence Zuckerberg to “lifetime prison” and the technology CEO armed Facebook with weapons during the 2016 U.S. presidential election.
Meta, citing the ever-changing legal and policy landscape, has made a series of comprehensive changes in recent months, appearing to mitigate Trump’s criticism of Zuckerberg and Facebook, including weakening fact-checking partnerships and diversity initiatives. Last December, Mehta donated $1 million to Trump’s inauguration fund. Meta has also lobbyed the Trump administration in recent weeks to stop the antitrust trial and see the government and companies strike, the Wall Street Journal reported.
“Regulators should support innovation in the United States rather than seeking to break up a great American company and further improve China on key issues such as AI,” Mehta said in a statement.
•Email: ylau@postmedia.com
Bookmark our website and support our journalism: Don’t miss the business news you need to know – add FinancialPost.com to your bookmark and sign up for our newsletter here.
[ad_2]
Source link
