Forcing a Meta Breakup Would Be Bad News for Consumers

Meta has spurred strong feelings on both sides of the aisle for various policy choices. But regardless of how one feels about how the company decides to run its platforms, this case could have significant consequences for consumers and impact the future of myriad industries.

While Facebook, Instagram, and WhatsApp may be household names today, that wasn’t always the case. In fact, at the time of its acquisition, late-night comics like Jon Stewart mocked the millions of dollars Facebook paid to acquire Instagram as “really lame.” Similarly, business experts regarded the billions spent to acquire WhatsApp as “ludicrous.”

The FTC cleared both of these transactions when they occurred. Now, however, they want a do-over, claiming that consumers would have been better off without them. The problem with this do-over approach is that it presumes that Instagram and WhatsApp would have evolved similarly without Meta’s investment. That’s far too simplistic.

Thanks to the integration, Meta was able to provide additional resources to the companies and also provide consumers with specific experiences. Yes, these smaller companies might have become challengers, but they also might have failed or faded without being acquired. The internet that “could have been” should not be presumed to be more competitive than the one that exists.

For consumers today, there is a wide array of social media platforms to connect and communicate with friends, family, and the general public. This includes platforms both owned by Meta and those that are not. The FTC’s market definition does not recognize this reality and instead seeks to define “personal social networks” so narrowly that it excludes popular online products like TikTok. This does not reflect the reality of the consumer experience, especially when considering trends among Gen Z users.

But why should consumers care if Meta has to split off from Instagram and WhatsApp? Well, it might make their experiences on those platforms worse. A court-ordered breakup would also likely create requirements that prevent things like cross-posting or messaging interoperability. This could also eliminate certain products consumers like. For example, what if Meta were faced with the choice of keeping only Messenger or WhatsApp?

But it’s not just functionality users would lose. Separate platforms would have fewer resources to invest in the user experience, keeping teens safe online, or emerging technologies like artificial intelligence. Smaller companies without cross-platform operability would also likely be more reliant on advertising, making them both more responsive to their advertisers’ demands than to their consumers and leading to greater data usage or more restrictive content moderation. A breakup could also splinter teams within the company and spread talent out across a broader base. This could disrupt existing research and development and prevent future collaboration on future innovations.

The loss for consumers also extends beyond social media. If the government is successful, this sort of after-the-fact intervention could expand into other markets. The government could start seeking to undo previous mergers or acquisitions, leading to uncertainty about the status of certain companies and creating a chilling effect on businesses.

Antitrust is already a powerful tool, but this expansion could create additional ripples for any industry or large company that finds itself politically unpopular, preventing beneficial actions. The question that policymakers and the public should ask themselves is not how they feel about those they agree with having such power but how they feel about those they disagree with having such power.

As the Meta case continues, the focus must be on consumers, not companies or competitors. The tech industry remains incredibly dynamic, and social media continue to evolve. Eighteen years ago, headlines said MySpace was a natural monopoly, but innovation proved different.

If we keep looking only for the next Meta, we will likely miss what’s actually happening — or worse, we will allow antitrust enforcement to stop what the market would have given us that is even better than we imagined.