In recent years, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) have undergone significant transformations in how they view their regulatory missions. Inspired by neo-Brandeis ideology and the naive belief that contemporary problems require a strong government hand to guide market processes, the agencies have increasingly pivoted from a focus on consumer welfare to a broader focus on squashing mergers.
In practice, this means the FTC and DOJ are challenging a record number of acquisitions. Unfortunately, these court challenges often incorrectly define the market in question. Two major cases currently before the courts exemplify this trend. They include an FTC lawsuit against Meta and a DOJ lawsuit against Google. The outcome of each could have enormous implications for the consumer market, so it is important to set the record straight.
The Meta case dates back to 2020, when the FTC first sued the technology company for allegedly illegally monopolizing the personal social networking services (PSNS) market following its acquisition of Instagram in 2012 and WhatsApp in 2014. While that initial claim was rightly dismissed due to the commission’s failure to present sufficient evidence, an amended version of that complaint was later allowed to proceed.
The crux of the FTC’s original lawsuit remains unchanged–that Meta unlawfully acquired and now maintains a PSNS monopoly. As a result, Meta has asked the court to dismiss the lawsuit, correctly noting that the recent discovery phase turned up no new evidence that would justify government intervention.
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Nate Scherer is a policy analyst with the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit us at www.TheAmericanConsumer.Org or follow us on X @ConsumerPal. This piece is exclusive to Broadband Breakfast.