This Monday, the United States Federal Trade Commission (FTC) opened a landmark lawsuit against Meta — an antitrust violation under Section 2 of the Sherman Antitrust Act — for which a US district court in Washington DC is holding a trial to determine if the tech giant unlawfully acquired rivals like Instagram and WhatsApp to eliminate competition and to establish a monopoly for itself in the social media space.
FTC’s lead litigator Daniel Matheson said in court, “For more than 100 years, American public policy has insisted firms must compete if they want to succeed. The reason we are here is that Meta broke the deal. They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them.”
Meta, on the other hand, countered the allegations, saying, “This case is a grab bag of FTC theories at war with fact and at war with the law. The facts are going to prove that the FTC’s theories are all wrong.” It’s been over a decade since Meta acquired both of these companies. Back when the company was still called Facebook, Mark Zuckerberg bought Instagram for $1 billion in 2012, and WhatsApp for $19 billion in 2014.
What’s interesting here is that the FTC has been alleging that Meta “overpaid” both these companies to “neutralise” them, as per an internal memo. If the FTC wins the case, Meta might be forced to sell both companies, changing the way Big Tech functions.
While all this was unfolding in the US this week, legal trouble also unrolled for Alphabet in the UK. On Wednesday, April 16, Google (of which Alphabet is the parent company) got charged with a $6.64 billion lawsuit in Britain for allegedly shutting out competition through unfair means.
However, this is where the consumer comes in.
The age of information
Facebook, Instagram, WhatsApp (all owned by Meta) and most tech companies for that matter, function on the economy of data. These platforms might be free to use, but they’re tracking and storing a lot of your activity to then sell them to other companies, and push targeted advertisements towards you.
For instance, a report by Security.org recently noted that out of all big tech companies — Alphabet, Meta, Microsoft, Apple, and Amazon — Google is the most notorious when it comes to privacy concerns, and Apple collects the least amount of data from consumers, making it the safest out of them in comparative terms.
It noted that through the many services it offers, Google tracks everything from your name, phone number, payment information, stored documents/ spreadsheets/ media, IP address, etc, to your system activity, data about interactions between apps, what you’re searching for, people you communicate or share content with, types of calls you make/ receive, calling party number, GPS data, information about things near the device, and more.
Similarly, Facebook tracks your stored media, metadata, IP address, messages, sensor data from your device, how you interact with content and advertisements, etc. This data is also shared with third parties and businesses who advertise on the platform.
In fact, in a survey conducted by polling body Gallup in the US last year, Big Tech ranked “below average” on the level of confidence that people had in institutions. Moreover, the confidence towards Big Tech fell to 27% in 2024, down from 32% that people had polled in 2020.
That’s not surprising, considering that in 2018, US media broke the Cambridge Analytics scandal —wherein Facebook shared the personal data of its users with the consulting firm for targeted political advertising.
From a consumer’s perspective, there’s distrust in these companies, for sure. But there’s also a reliance on them that has only grown multifold over the years. Small and medium businesses have to be on these platforms to reach their audiences, most people rely on services offered by these giants like email and cloud storage for everyday tasks, marketplaces on these apps are a big factor too. Add artificial intelligence into the mix, and the usage grows even more.
Big tech companies are constantly on the top of the S&P 500 lists, raking in trillions of dollars in their combined market capitalisation. OpenAI in March raised $40 billion in what was called “the largest private tech funding round on record,” taking the company’s total valuation to over $300 billion.
But there’s a growing acknowledgment of the malpractices too, fortunately for consumers. In August last year, a US federal judge ruled in an antitrust case against Google (filed by the Department of Justice in 2020) that Google held an “illegal monopoly” over online search and advertising.
What these market monopolies mean for the consumer and how the antitrust violations play out is yet to be seen, but what remains is the fact that our data is out in the open, raking billions for Big Tech.
