Meta withheld information about Instagram and WhatsApp deals

The US Federal Trade Commission claimed that Meta Platforms Inc. withheld information to federal regulators when they first reviewed the Instagram and WhatsApp purchases. This was part of a suit filed by the US Federal Trade Commission in an attempt to dismantle the social media giant.

In 2012, the company that was formerly Facebook purchased Instagram and in 2014 it bought WhatsApp. The FTC examined both transactions at the time of their closing – Instagram in an in-depth review, and WhatsApp as part a 30-day simple one.

Since then, the agency has been heavily criticized for allowing these deals to proceed. The antitrust agency filed a lawsuit against Meta in 2020 alleging it had monopolised personal social networking by buying up rivals. Meta wants the case dismissed before the trial because it invested billions of dollars in the apps. It also argues that the FTC should not be allowed to change its mind about the mergers.

The FTC filed a complaint on Tuesday stating that the case involved “information Meta had in their files and did [not] provide” during the initial reviews.

The agency stated that “at Meta’s request, the FTC only undertook a limited examination” of the transactions. The FTC has now a vastly increased amount of evidence including documents Meta didn’t provide in 2012 or 2014.

Meta’s spokesperson stated that the FTC failed to prove its claims.

In a press release, spokesperson Chris Sgro stated that “the evidence shows instead that Meta faces fierce competitors and that Meta’s substantial investment in time and resources into Instagram and WhatsApp have benefited consumers in making the apps the services that millions of users today enjoy for free.” “The FTC did nothing over the last four years to support its case, while Meta invested billions in building quality products.”

Instagram’s popularity is a key factor in Meta’s success. According to court documents in the case, Instagram generated US$16.5bil in the first half of 2022. This accounted for almost 30% of Meta’s total revenue. Meta doesn’t break out Instagram revenue during its quarterly earnings reports.

The court filing on Tuesday is not the first time that Meta has been accused of failing to provide information that could have affected the initial merger reviews. In 2017, European antitrust regulators fining Meta EUR110mil for misleading information regarding the WhatsApp deal.

The agency stated in its filing that Meta also degraded their platform for those users who are most dependent on the apps. They increased the amount of ads on Instagram, and then on its flagship product Facebook. The FTC also said that Meta “chronically deprives Instagram of resources for innovation and improvement features”.

US District Judge James Boasberg, in Washington, is overseeing the case. He has not indicated when he will rule on Meta’s request, nor has he established a date for trial. Bloomberg

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