FTC's Defeat In Challenge To Meta's Acquisitions Highlights Challenges In Proving "Killer Acquisitions" In Dynamic Tech Markets

In a significant setback for the Federal Trade Commission (FTC), the U.S. District Court for the District of Columbia ruled in favor of Meta Platforms, Inc. (formerly Facebook) in FTC v. Meta Platforms, Inc., rejecting the agency's claims that Meta unlawfully maintained a monopoly in the social media space through its acquisitions of Instagram and WhatsApp.¹ The November 18, 2025, decision underscores the difficulties antitrust enforcers face in defining markets and proving monopoly power in rapidly evolving industries, particularly under so-called "killer acquisition" theories.

Case Summary

Facebook acquired Instagram in 2012 and WhatsApp in 2014. At the time, the FTC cleared both acquisitions but then "[y]ears later, it changed its mind."² In 2020, the FTC filed suit alleging violations of Section 2 of the Sherman Act. The agency argued that Meta held monopoly power in a narrowly defined "personal social networking" (PSN) market—limited to apps like Facebook, Instagram, Snapchat, and smaller platforms such as MeWe. According to the FTC, Meta preserved this dominance not through superior competition but by acquiring potential rivals—Instagram in 2012 and WhatsApp in 2014—to eliminate threats, a classic "killer acquisition" strategy. The FTC sought to unwind these deals, claiming they stifled innovation and harmed consumers.

After a lengthy bench trial with industry witnesses and expert testimony, Chief Judge James E. Boasberg rejected the FTC's claims. The court emphasized the rapid evolution of the social media landscape since filing, noting that apps once distinguishable as "social networking" versus "social media" have converged. Key findings include:

• Market Definition: The FTC failed to prove a separate PSN market. The court found that Meta competes in a broader "social media" market that includes at least TikTok and YouTube, which vie for users' time and attention. Evidence showed user substitution between these platforms (e.g., during outages or bans), app convergence (e.g., Meta's addition of Reels mirroring TikTok's short-form video features), and shared characteristics like AI-recommended content, messaging, and video sharing. Applying traditional market-definition frameworks from cases like Brown Shoe Co. v. United States and FTC v. Whole Foods Market, Inc., the court concluded the FTC's narrow PSN market was outdated. Because the litigation took nearly five years, the analysis underscores the challenges agencies face in defining markets in dynamic industries.
• No Monopoly Power: Even assuming a PSN market, the FTC did not establish Meta currently holds a monopoly (generally above a 70 percent share). The court discounted direct evidence (e.g., ad loads, user sentiment) and indirect evidence (e.g., market share calculations excluding TikTok/YouTube), noting Meta's share falls below monopoly levels when TikTok alone is included. The opinion relied heavily on empirical "natural experiments," such as Meta's 2021 outage and TikTok's India ban, which showed cross-platform competition.
• Timing and Acquisitions: While recognizing five years of litigation and rapid industry change, the court resolved the case on market boundaries alone, without reaching the acquisitions' competitive effects.

Context with Other Recent "Killer Acquisition" Cases

"Killer acquisitions" refer to deals where incumbents acquire nascent or potential competitors to neutralize future threats, often in innovative sectors like tech, pharma, and digital platforms. The FTC and Department of Justice (DOJ) intensified scrutiny of such deals under both the first Trump and Biden administrations, but courts have consistently required strong evidence of competitive harm.

• FTC v. Meta/Within (2023): In a similar tech case, the FTC sought to block Meta's acquisition of VR fitness app developer Within Unlimited, alleging it would eliminate nascent competition in the VR fitness market. The FTC successfully argued a narrow market definition—"VR dedicated fitness apps"—which the Northern District of California accepted. However, the court denied the FTC's preliminary injunction, finding insufficient evidence that Meta would likely have entered by building its own fitness app rather than acquiring one. The court found that while Meta had financial resources and interest in VR fitness, it lacked the specific content creation and studio production capabilities necessary to make independent entry "reasonably probable." The deal closed in February 2023, demonstrating the high evidentiary burden for proving potential competition theories—even when the market definition is accepted.
• FTC v. Illumina/Grail (2021–2024): This biotech case involved Illumina's acquisition of Grail, a cancer-detection startup reliant on Illumina's sequencing technology. The FTC alleged a vertical "killer acquisition" strategy to foreclose competitors. While an FTC administrative law judge initially ruled for Illumina, the full Commission reversed. On appeal, the Fifth Circuit vacated the Commission's divestiture order on the grounds that it applied an erroneous legal standard, but was generally supportive of the Commission's findings and remanded for further proceedings. Based on substantial supporting evidence, the court found that products in development should be considered within the relevant market. Like Meta, the court accepted a broader product market, but unlike Meta, for most developers to compete effectively, they would need access to an input that only the acquirer (Illumina) could provide. In view of these circumstances, the Fifth Circuit found that it was reasonable to conclude that Illumina would likely foreclose Grail's competitors. The deal was ultimately abandoned in 2024.
• DOJ v. Visa/Plaid (2020–2021): The DOJ sued to block Visa's proposed acquisition of Plaid, alleging the deal would eliminate a nascent competitive threat to Visa's online debit business. The complaint emphasized Plaid's gateway role into consumer bank accounts and its potential to develop debit routing services that could undercut Visa's fees. Faced with the litigation, Visa abandoned the transaction in early 2021.

Conclusion

Meta illustrates the substantial evidentiary burden facing enforcement agencies in monopolization claims based on narrow market definitions and theories of prospective competitive harm, particularly in post-consummation litigation. The contrast between recent enforcement outcomes is instructive. Successful challenges such as Illumina/GRAIL and the suit to block Visa/Plaid rested on concrete evidence of specific competitive harms—including documentable foreclosure incentives and the elimination of measurable innovation trajectories. Conversely, the outcomes in this case and Meta/Within demonstrate that speculative theories of harm, unsupported by substantial contemporaneous evidence of anticompetitive effects, face significant judicial skepticism. The common thread is evidentiary rigor: courts are more likely to discount theoretical concerns about market structure or hypothetical future harm without the demonstration of actual competitive constraints, documented anticompetitive intent, and/or quantifiable harm.

Footnotes

1. FTC v. Meta Platforms, Inc., No. 1:20-cv-03590 JEB (D.D.C. Nov. 18, 2025).

2. Id. at 20.

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