Federal court dismisses FTC antitrust case against Meta

A federal judge dismissed the Federal Trade Commission's antitrust lawsuit against Meta Platforms on November 18, 2025, concluding that the company does not hold monopoly power in social media markets. According to the 89-page opinion from U.S. District Court Judge James Boasberg, the FTC failed to prove Meta operates within a separate "personal social networking" market distinct from broader social media competition.

The ruling marks a significant defeat for federal regulators who filed the case in December 2020, alleging Meta illegally maintained its monopoly by acquiring Instagram in 2012 and WhatsApp in 2014. Judge Boasberg determined that TikTok and YouTube compete directly with Facebook and Instagram, giving Meta a market share too small to constitute monopoly power under antitrust law.

"While it once might have made sense to partition apps into separate markets of social networking and social media, that wall has since broken down," Judge Boasberg wrote in the memorandum opinion. The court found that Meta competes in a broader social media market that includes at minimum TikTok and YouTube, substantially diminishing the company's market share below monopoly levels.

The FTC had argued Facebook, Instagram, Snapchat, and minor platform MeWe competed exclusively with one another in a market the agency termed "personal social networking." The commission claimed Meta held monopoly power in this market since 2011 and preserved its dominance through strategic acquisitions rather than competitive merit, violating Section 2 of the Sherman Act.

Meta contested this market definition, arguing it competes in a broader social media landscape that necessarily includes TikTok and YouTube as fierce competitors for users' time and attention. Adding those two companies to the relevant market calculation reduced Meta's share below monopoly thresholds, according to company filings.

The case underwent extensive procedural development since its initial filing. Judge Boasberg dismissed the FTC's first complaint in 2021, questioning whether the agency adequately defined personal social networking market boundaries and established Meta's monopoly position. The FTC filed an amended complaint later that year, which survived dismissal motions and progressed through discovery to a six-week bench trial held this spring.

The court examined how Facebook and Instagram transformed substantially over the litigation's five-year timeline. When Americans first downloaded Facebook in 2004, the platform offered a basic tool to add friends and view their posts. By 2025, only 17% of time spent on Facebook involves viewing content from friends, according to court findings. On Instagram, that figure dropped to 7%.

Short videos posted by strangers and recommended by artificial intelligence algorithms now dominate both platforms. Most time that Americans spend on Facebook is spent watching videos, with Reels—Meta's short-form video feature launched in 2021—becoming the single most-used part of the application. Similar patterns emerged on Instagram, where Reels consumption accounts for the largest share of user time.

This shift toward AI-recommended video content made Meta's apps increasingly similar to TikTok and YouTube, Judge Boasberg determined. Meta added Reels to Instagram in 2020 and Facebook in 2021, directly copying TikTok's format to retain users migrating to the competing platform. The court noted that Meta's Reels, TikTok's videos, and YouTube's Shorts are "virtually—and deliberately—indistinguishable in function and user experience."

The FTC presented direct evidence attempting to prove monopoly power, including Meta's substantial profits, alleged increases in quality-adjusted prices through higher advertising loads, and price discrimination among user segments. Judge Boasberg found none of these arguments persuasive, noting that high profits alone could reflect exceptional efficiency, shrewd management, or successful risky investments rather than monopolistic behavior.

Regarding advertising loads, the court determined that while users prefer fewer advertisements, the preference remains slight. Showing Facebook users no advertisements whatsoever increased their time on the platform by only 7%, according to trial evidence. Even for teenagers and young adults—demographics most sensitive to advertising—removing 80% of ads would increase Facebook usage by merely 3%.

More compelling evidence came from natural experiments and consumer behavior studies. When TikTok was banned in India in 2020, Indians immediately increased their Facebook time by over 60% and roughly doubled their Instagram usage compared to synthetic control groups, according to court findings. During a brief TikTok outage in the United States in January 2025, Americans increased Instagram use substantially and Facebook use comparably.

Meta's payment experiment provided additional insights. The company recruited 6,000 participants and paid them $4 for each hour they reduced Facebook or Instagram usage. Among those paid to use Facebook less, the greatest share of reallocated time went to YouTube, followed by Instagram and TikTok. For Instagram users, YouTube again captured the largest share, followed by Facebook and TikTok.

Judge Boasberg found this evidence demonstrated that consumers treat TikTok and YouTube as reasonable substitutes for Facebook and Instagram. The court noted that Meta invested approximately $4 billion annually in Reels development specifically to counter competitive pressure from TikTok, indicating substitution rates significant enough to constrain Meta's market power.

Industry participants consistently recognized this competitive dynamic, according to court records. Internal TikTok documents identified "YouTube and Instagram are TikTok's most important competitors." Google documents stated TikTok and YouTube compete with Facebook. Meta CEO Mark Zuckerberg told investors that "competition has gotten more intense, especially with the rise of TikTok which is one of the most effective competitors we have ever faced."

The court measured market share using time spent as the primary metric, finding it best captures competitive dynamics in markets where free applications compete for user attention. Even excluding YouTube from the relevant market, Meta's share of time spent reached only a modest percentage when TikTok was included—below established legal thresholds for monopoly power.

Legal precedent generally requires market shares above 70-80% to establish monopoly power, Judge Boasberg noted. The Supreme Court has never found a party with less than 75% market share to possess monopoly power, and Judge Learned Hand's canonical opinion in United States v. Aluminum Co. of America stated "it is doubtful whether sixty or sixty-four percent would be enough."

Meta's market share appeared to be declining as TikTok continued gaining users. The opinion emphasized that monopoly power requires the ability to maintain market share, and falling market share weighs against monopoly findings. TikTok entered the U.S. market in 2018 and rapidly captured substantial user time, forcing Meta to fundamentally transform its applications through massive Reels investments.

The FTC's alternative theory—that a subset of users especially values friend-sharing content and faces no substitutes—also failed. Judge Boasberg found no consistent relationship between features containing more friend content and higher advertising loads. The Facebook feature with the highest share of friend content (Stories) had lower advertising load than the main Facebook Feed, contradicting the agency's price discrimination hypothesis.

The ruling carries significant implications for digital platform regulation and antitrust enforcement. Meta previously sought dismissal of the FTC lawsuit, arguing both Instagram and WhatsApp acquisitions received regulatory approval years earlier and that revisiting these deals undermined merger review certainty.

The decision arrives as technology companies face intensifying regulatory scrutiny globally. The FTC simultaneously pursues antitrust cases against Amazon and Google, while federal agencies launched a comprehensive review of regulations that may reduce competition following President Trump's April 2025 executive order. Apple, meanwhile, faces trial after federal courts denied dismissal motions in a Department of Justice lawsuit alleging smartphone market monopolization.

Meta's advertising business has shown consistent growth despite the ongoing litigation. The company posted 22% advertising revenue growth to $46.6 billion in second quarter 2025, driven by AI-powered recommendation systems and creative tools serving 3.48 billion daily active users across its Family of Apps.

Judge Boasberg acknowledged that while personal social networking apps may have constituted a separate market when the FTC filed suit in 2020 or when Meta acquired Instagram and WhatsApp, "that is no longer the case." The opinion quoted Greek philosopher Heraclitus's observation that no one steps into the same river twice, noting that social media's landscape has changed markedly over five years.

The court emphasized it decided the case solely on market definition and monopoly power, not addressing whether Meta's acquisitions constituted anticompetitive conduct. Because monopolization requires both holding monopoly power and maintaining it through anticompetitive means, proving Meta lacks monopoly power proved sufficient to dismiss the case.

Timeline

• 2004: Facebook launches for Harvard students, later expanding to general public in 2006
• 2010: Kevin Systrom and Mike Krieger launch Instagram photo-sharing application
• 2012: Facebook acquires Instagram for approximately $1 billion with FTC approval
• 2014: Facebook acquires WhatsApp messaging service with regulatory approval
• 2018: TikTok enters United States market, beginning rapid user growth
• December 2020: FTC files initial antitrust complaint against Facebook
• June 2021: Federal court dismisses initial FTC complaint for insufficient monopoly allegations
• 2021: Meta adds Reels feature to Facebook and Instagram to compete with TikTok
• August 2021: FTC files amended complaint with strengthened monopoly power allegations
• January 2022: Federal court allows amended complaint to proceed to discovery
• 2024: Federal court largely denies summary judgment motions from both parties
• Spring 2025: Six-week bench trial conducted with extensive witness testimony
• November 18, 2025: Federal court issues ruling dismissing FTC antitrust case

Summary

Who: U.S. District Court Judge James Boasberg ruled on the Federal Trade Commission's antitrust lawsuit against Meta Platforms (formerly Facebook), addressing claims that the company illegally maintained monopoly power through its acquisitions of Instagram and WhatsApp.

What: The court dismissed the FTC's case after determining Meta does not hold monopoly power in social media markets. Judge Boasberg concluded that TikTok and YouTube compete directly with Facebook and Instagram, placing all four platforms in a broader social media market where Meta's share falls below monopoly thresholds established in antitrust law.

When: The November 18, 2025 ruling concluded five years of litigation that began when the FTC filed suit in December 2020, survived multiple dismissal attempts, proceeded through extensive discovery, and culminated in a six-week bench trial held in spring 2025.

Where: The case was decided in U.S. District Court for the District of Columbia, with implications extending across U.S. social media markets where Meta competes with TikTok, YouTube, Snapchat, and other platforms for user attention and advertising revenue.

Why: The ruling matters because it establishes that rapidly evolving social media markets cannot be rigidly partitioned into separate competitive spheres when consumer behavior demonstrates widespread substitution between platforms. Judge Boasberg found that as Facebook and Instagram transformed to emphasize AI-recommended video content, they became increasingly similar to TikTok and YouTube, preventing Meta from exercising monopoly power regardless of past market definitions. The decision may influence how regulators approach market definition in dynamic technology sectors where platform features and user behaviors shift substantially over time.