00:00 Speaker A
Well, day one is unfolding in the government’s high-stakes antitrust trial against Meta’s Facebook. The case, which was filed by the Federal Trade Commission during President Trump’s first term, seeks to force Meta to sell off Instagram and WhatsApp. And here with the details is Yahoo Finance’s very own Alexis Keenan, Alexis.
00:19 Alexis Keenan
Yeah, so already up on the stand today, first witness out of the box for the FTC, CEO Mark Zuckerberg. So he’s testifying right now. Uh, we don’t know so much yet about what he’s been saying, but he has been asked about network effects. So the fact that buying up Instagram, WhatsApp, and other social media companies helps drive Facebook then’s bottom line, of course, now owned by Meta. Now, the FTC in this case, it says that Facebook bought these companies in order to monopolize the market that they’re calling personal social networking. They say that they used it to block rivals and that they harm competition. Meta on the other hand says, no, we don’t even have a monopoly in social media or the personal social networking market. They say that the FTC’s market definition, their baseline, that they’ve got it all wrong. It’s flawed. They say that take a look at the different, um, companies, the social media companies that the FTC is including in the market. So the FTC says included is Facebook, Instagram, WhatsApp, Snapchat, and another LA-based social media company called MeWe. Now, not included, importantly, as if you’re arguing for Meta, is LinkedIn, YouTube, Reddit, X, and TikTok. Uh, so TikTok, it launched in 2016, uh, and Meta’s up there arguing, certainly in their opening statements, and you got to include these other social media companies in this market, otherwise it just doesn’t work FTC. So the judge in this case has has acknowledged that this is an uphill battle for the FTC. Uh, I saw some tweets coming out from Meta’s comms executive, Andy Stone, tweeting from the courtroom, part of the opening statement, he was saying that for every single one of the many activities offered on Meta’s apps, that it faces vigorous competition, he said. He said, we all compete for time in this market. Another graphic went up too during these statements showing that when that TikTok ban went to into effect very briefly, right? In January, under the executive order from President Biden, uh, that showed that traffic then flowed into Instagram, Facebook, and other social media and off of TikTok. So that’s a central part of Meta’s argument here.
03:10 Speaker A
Reportedly, Alexis, reportedly, from what I understand, Zuckerberg has been actually lobbying Trump here, right? Like the president to step in, intercede, settle this case. When you talk to folks, does that come up? Like whether that’s at all likelihood that the president would actually step in, step in, even at this stage of the case?
03:36 Alexis Keenan
Yes.
03:37 Speaker A
Right.
03:39 Alexis Keenan
Yeah, in this case, yes. You know, in a lot of things we say are first when it comes to Trump 1.0 or Trump 2.0, I should say. Uh, the antitrust lawyers say, it would almost be irresponsible, perhaps, for Mark Zuckerberg to not make these overtures because Wall Street might say, well, why aren’t you doing it? He’s cur you need to curry favor with the president because this is how it works. You had the FTC chair and Andrew Ferguson saying, uh, that he’s kind of deferring to Trump and that’s that’s also unusual, right? The FTC is usually thought as an independent body. So yeah, it might be looked at like you’re not doing your job, CEO.
04:33 Speaker A
Yeah, I I totally agree with Meta. And I am long Meta shares, right? So perhaps I have a vested interest. But, you know, when you think about it, to not include LinkedIn or TikTok as social media competitors, I think it’s absurd. I think the only reason this thing is a trial right now is because the FTC used to be headed by Lena Khan and she wanted to go after anything that was big and techy because that’s where the money is. I am shocked that the new FTC, uh, commissioners didn’t drop the case. I just don’t, I don’t think there’s a case here.
05:24 Alexis Keenan
Well, you have to look back though, this case was originally investigated and brought under Trump 1.0. It was a 2020 case.
05:32 Speaker A
And it took him five years.
05:35 Alexis Keenan
Yeah.
05:36 Speaker A
It’s been a long time.
05:37 Alexis Keenan
Crazy. Yeah. And and also, Meta has made the point that the environment for social media competition has changed so dramatically, as Google has said in its case, because of AI, right? So you inject that into these platforms and everything now, five, six years later looks so different.
06:00 Speaker A
Could if if Meta loses, Alexis, could Trump step in and tell these commissioners, hey, let let’s get a deal done. Let’s settle this thing?
06:12 Alexis Keenan
Yeah, absolutely. And certainly a deal can be made post verdict, even. So in in this case, this is a judge decision. This is not a jury trial. But yes, all all the way up until, I guess, the fat lady sings.
06:27 Speaker A
Yeah. All right. Alexis, thank you for helping us walk through a complex stuff. Appreciate it.