Executive Summary
- What’s new: A federal district court concluded that the FTC failed to prove that Meta was monopolizing a “personal social networking” market through its acquisitions of WhatsApp and Instagram.
- Why it matters: The decision demonstrates how a dynamic marketplace can be centrally relevant in antitrust market definition, and highlights the importance of forward-looking evidence, credible witnesses and coherent theories of harm.
- What to do next: Companies facing antitrust agency investigations or contemplating M&A activity that may be subject to antitrust review — particularly those in technology markets that involve rapidly evolving products and services — should consider developing arguments and evidence demonstrating that static or backward-looking market shares are not predictive of future competitive dynamics.
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On November 18, 2025, Chief Judge James Boasberg of the United States District Court for the District of Columbia concluded that the Federal Trade Commission (FTC) had failed to prove that Meta unlawfully monopolized the market for “personal social networking” through its acquisitions of Instagram (in 2012) and WhatsApp (in 2014) after nearly five years of litigation. In his 86-page opinion, Judge Boasberg systematically rejected the FTC’s arguments, finding that the FTC’s proposed relevant market did not account for the market realities of how users engage with social networking apps today, and that the FTC failed to carry its burden of demonstrating that Meta is a monopolist insulated from competition. The decision provides several notable takeaways for companies contemplating M&A activity and for companies active in markets where technology change is rapid and competitive dynamics are fluid.
Case Background
The FTC filed its original complaint in 2020, repleading in an amended complaint after the court granted Meta’s initial motion to dismiss. The amended complaint included expanded market share allegations and a refined exclusionary conduct theory. From the start, however, the court expressed reservations about the FTC’s ability to prove up its claims, noting that while the amended complaint stated a claim, “the agency may well face a tall task down the road in proving its allegations,” FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 40 (D.D.C. 2022), and later observing that while the agency had met “the forgiving summary-judgment standard,” the FTC “face[d] hard questions about whether its claims c[ould] hold up in the crucible of trial.” FTC v. Meta Platforms, Inc., 775 F. Supp. 3d 16, 26 (D.D.C. 2024). The case went to trial earlier this year.
Judge Boasberg’s Legal Analysis
The FTC Failed To Meet Section 13(b)’s Forward-Looking Standard
Judge Boasberg began his legal analysis by flagging the key temporal question before him. He noted at the outset that — as he had held “throughout this case” — the FTC was subject to the standard set forth under Section 13(b) of the FTC Act, pursuant to which the FTC could “seek to enjoin only conduct that currently violates the law or imminently will.” Memorandum Opinion at 23, FTC v. Meta Platforms, Inc., No. 1:20-cv-03590 (D.D.C. Nov. 18, 2025) (Opinion) (emphasis added). This temporal element was critical to the decision, because “[w]hether or not Meta enjoyed monopoly power in the past” did not answer the relevant question of whether it “continues to hold such power now.” Id. at 89. Indeed, the court pointed out the stark evolution of Meta’s apps overtime, noting “[t]he Facebook and Instagram that exist today bear little resemblance to the versions reader might remember from the 2010s.” Id. at 8. Judge Boasberg rejected the FTC’s argument that the agency could seek an injunction to address lingering harm from a past violation that was still purportedly harming competition. The FTC could not satisfy its obligation to prove current or imminent harm by relying on backward-looking theories and views of the market that no longer reflected the reality of the marketplace.
The FTC Failed To Show Monopoly Power With Direct Evidence
Judge Boasberg next turned to the FTC’s argument that Meta’s monopoly power could be shown by direct evidence; his conclusion that FTC had not succeeded reconfirms the challenges of making such a showing. The FTC made three arguments in claiming that there was direct evidence of monopoly power: first, that Meta earned profits above its capital costs; second, that Meta profitably increased prices without a proportional increase in quality; and third, that Meta practices a form of price discrimination by showing more ads to certain users. The court quickly dismissed each.
As to the FTC’s first argument, the court concluded that Meta’s profits could have been driven by “several other factors” besides monopoly power, such as superior technology or return on investments, “none of which” were rebutted by the FTC. Opinion at 25. Not only did the FTC fail to foreclose those possibilities, but it also failed to present any evidence of comparable profits in other prosperous industries, a necessary component of proving monopoly power through high profits.
As to the FTC’s second argument, the court disagreed that Meta offers a worse product today for the same price, noting that Meta’s apps have continuously improved, even while Facebook and Instagram have always been (and continue to be) free for consumers. The court further disagreed with the FTC’s assertion that more ads on Facebook and Instagram were necessarily indicative of a reduction in quality. Rather, the court found that the quality and relevance of the ads were important considerations, as attractive, engaging and unobtrusive ads imposed low costs on the user. Moreover, the court determined that sentiment surveys reflected “what people think of Meta’s business as seen through the lens of salient news stories,” rather than users’ perceptions about the quality of Meta’s products. Id. at 31.
As to the FTC’s third argument, the court found that Meta’s ability to show more ads to certain users was merely a form of “ubiquitous” price discrimination that was indicative of market power, rather than monopoly power, which was insufficient to carry the FTC’s burden. Id. at 35.
The FTC’s View of the Relevant Market Was Outdated and Did Not Account for Competitive Realities and Trajectory of the Market
Turning to the FTC’s proffered indirect evidence of monopoly power, the court concluded that the evidence similarly failed to carry the FTC’s burden. The court first underscored that “the landscape that existed only five years ago when the [FTC] brought this suit has changed markedly,” and that the evidence presented showed it no longer makes sense to partition apps into separate markets of social networking and social media, as the FTC sought to do. Opinion at 1, 8-16. Applying the hypothetical-monopolist test, the court concluded that the relevant product market should include TikTok and YouTube. The court examined whether a small but significant and nontransitory increase in their quality-adjusted price (SSNIP) would be profitable for Meta — in other words, whether Meta could bloat its products with ads and still retain users. After assessing both observational and empirical evidence, including panel data as well as natural and field experiments, the court concluded that TikTok and YouTube are sufficient substitutes for Meta’s apps that would prevent Meta from profitably implementing an SSNIP, and thus should be included in the relevant market.
The court also applied the Supreme Court’s Brown Shoe factors to analyze market definition, which consider the products’ peculiar characteristics and uses, industry or public recognition of a market, unique production facilities, and distinct customers, prices or sensitivities to price changes — and which likewise indicated that TikTok and YouTube should be considered part of the relevant market. The court explained that Facebook, Instagram, TikTok and YouTube have “evolved to have nearly identical main features” — a phenomenon the court calls “convergence.” Opinion at 14-16. As a result, TikTok and YouTube do not have sufficiently distinct characteristics to be excluded from FTC’s purported market. Moreover, the court determined that the FTC’s proffered market consisting of only Facebook, Instagram, Snapchat and MeWe lacks public recognition as a distinct market, and does not have unique production characteristics. The court also found no evidence that Meta’s apps have customers, prices or price change sensitivities that are distinct from those of YouTube and TikTok.
Further, the court rejected the FTC’s submarket argument — namely, that a subset of users who care more about friend sharing have no substitute for Facebook and Instagram’s personal social networking features, and are thus targeted by Meta for a higher ad load. The court emphasized that there is no evidence that smaller variations in ad load could constitute the type of “significant difference in price” indicative of a monopolist, and found no consistent relationship between the sharing of friend content and ad load, observing, instead that low ad load is often linked to a feature’s novelty.
Finally, the court assessed whether Meta’s market share, as measured primarily by total time spent by users on each app in a market consisting of Facebook, Instagram, Snapchat, TikTok, YouTube and smaller player MeWe, is sufficiently dominant to raise an inference monopoly power. While the specific numbers are redacted, it is clear from the Opinion that Meta’s market share is below 50% and falling. That, plus the presence of YouTube and TikTok in the product market, indicated that Meta was prevented from holding a monopoly.
Key Points and Implications for Future Antitrust Investigations and Litigation
- Injunctions require forward-looking evidence. The court’s decision will inevitably impact how the antitrust agencies approach injunctions going forward (whether in consummated merger challenges such as this one or other types of actions requiring proof of market or monopoly power), particularly in light of the court’s application of, and repeated emphasis on, the forward-looking nature of the Section 13(b) standard. Companies facing agency investigations and litigations should be cognizant of developing evidence demonstrating both the present state of the market as well as the market forces that will likely impact competition going forward. This may prove to be challenging for the antitrust agencies in industries where the pace of technological change is rapid and continuously evolving.
- Incoherent and contradictory theories will sink the ship. A common theme throughout Judge Boasberg’s decision is his criticism of the FTC’s theories as logically incoherent, internally contradictory, economically irrational or clearly contradicted by the record, even going so far as to state that the FTC’s theory that Meta underinvested in friends-and-family content “makes no sense.” Opinion at 32. These critiques reemphasize the need for companies subject to regulatory review or litigation to consider the facts and potential arguments holistically, and to assess and highlight the flaws in the agencies’ logic.
- Is the expert subject to a claim of bias? In rejecting the FTC’s proposed market definition, the court expressly noted its doubt about whether the FTC’s expert, Professor Scott Hemphill, “could have approached his task with an open mind” due to his unusual degree of pre-litigation involvement. Judge Boasberg noted in detail how Professor Hemphill met with the FTC before the complaint was filed and urged the agency to investigate Meta, proposed an antitrust theory of the case, and even identified specific persons to subpoena. The court’s skepticism here confirms the importance of evaluating how a proffered expert will be perceived by the factfinder, and the extent to which complaining parties can be portrayed as neutral observers to the process.
- What do the documents and the fact witnesses say? Judge Boasberg appears to have been most persuaded by testimony from Meta’s executives and its internal documents, which showed that Meta considered TikTok to be a major competitor. Although the court did mention testimony from Meta’s experts, the decision reinforces the importance of substantiating one’s defense through internal documents and credible executive testimony.
- Monopoly cases versus typical merger cases. While the decision relates to mergers and acquisitions, it is important to note that this was a monopolization case brought under Section 2 of the Sherman Act challenging long-closed acquisitions that the FTC had not challenged at the time they were consummated. The analysis of Meta’s position in the marketplace was somewhat different than the analysis that would be applied under Section 7 of the Clayton Act — i.e., whether the acquisition may result in a substantial lessening of competition in a line of commerce — which is the cause of action that would typically be invoked by the antitrust agencies challenging a proposed merger. While the principles articulated by Judge Boasberg around market definition and market dynamics would apply equally to a Clayton Act Section 7 claim, the antitrust agencies typically can claim a presumption of harm to competition in a Clayton Act Section 7 horizontal merger challenge with a combined market share of 30%, lower than the market share that is typically required to prove monopolization for a Section 2 Sherman Act claim. Companies contemplating merger and acquisition activity should keep this distinction in mind when evaluating potential transactions.
Nevertheless, particularly in technology markets like the one in Meta that involve products and services that are constantly changing, the ability to demonstrate that static or backward-looking market shares are not predictive of future competitive dynamics by pointing to forward-looking documents and analyses of market trends and the direction of technology is critical to defending transactions where regulators may have an initial perception that one or both parties have dominant positions due to historical performance.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.