Key Points 

• Mark Zuckerberg just gave his testimony in the Meta antitrust case, where he tried to convince the court that he did not buy Instagram and WhatsApp to get rid of competitors 

  
  

• Google was found to have illegally built monopoly power with its web advertising business 

  
  

• We will have to wait to see what happens to Meta and Google: will they have to break up their companies? 

This article discusses some news in the world of antitrust law, as it pertains to Meta and Google. It also discusses the importance of competition as per the Competition Bureau of Canada and the Federal Trade Commission so that we can take some important points from recent developments. 

1. Meta 

   
   

This was an interesting week—it was reported that Mark Zuckerberg gave his testimony in the hottest antitrust case since the Google antitrust case, which I wrote about here. Over the last few days, Zuckerberg told the U.S. District Judge James Boasberg, that he purchased Instagram and WhatsApp because he saw value in the companies, rather than to eliminate competitors. Still, the FTC alleges that Meta used a monopoly in its technology to generate massive profits. Why is this important? Meta could be forced to break off Instagram and WhatsApp—the two companies were startups when Meta bought them over 10 years ago, but now they are massive components of Meta. Apparently, while he was on the stand, Zuckerberg was asked to look at his own previous emails that he wrote to associates before and after the acquisition of Instagram and WhatsApp to clarify his motives. Was the purchase to halt Instagram’s growth and get rid of a threat? Or was it to improve Meta’s product by having WhatsApp run as an independent brand? 

Zuckerberg was just the first witness in the trial, so we have some time before we get the answer. The trial is supposed to last about eight weeks. On the stand, Zuckerberg testified that it was his job to understand what was going on so that he and his teams could respond quickly. In fact, he stressed that he was operating in a very competitive environment, and he was not the monopoly—in full deflective mode, he asserted that people spent more time on YouTube than on Facebook and Instagram combined. Of course, the problem with that argument is that the FTC did not consider YouTube to be a proper comparator to the friend-sharing technology, since it was involved in sharing videos.  

This case went back to 2020, and was filled with preliminary motions. We will keep you posted on any developments. 

2. Google 

   
   

This was also an interesting week for Google—in the second antitrust case regarding the alleged advertising monopoly, Google was found to have illegally built monopoly power with its web advertising business.  

In fact, the Department of Justice (DOJ) just announced that the Antitrust Division of the DOJ prevailed in its second monopolization case against Google since the company violated antitrust law by monopolizing open-web digital advertising markets. The DOJ stated that this was a landmark victory in the ongoing fight to stop Google from monopolizing the digital public square.  

It was Judge Leonie Brinkema who made the decision. We will soon find out what will happen to Google: will it need to be broken up? How will it be broken up? How long would it take to break it up? There will likely be a penalty phase where this is determined either late this year or early next year. 

This means that Google has been found to be a monopolist for the second time in a year: one for Search, and one for online advertising.  

We will keep you posted on any developments about the case. 

What Can we Take from These Developments? 

These cases against Meta and Google demonstrate how important it is for companies to not behave in anti-competitive ways. Interestingly, it does not seem to matter who was president at the time when these cases were commenced; people really frown on anti-competitive behaviour, regardless of who is in power. Simply put, the goal is to get companies to compete without abusing monopoly power. 

Why is this all important? The Competition Bureau of Canada has explained the following about competition and the link to efficiency, innovation, and productivity: 

“Competition has the power to drive our productivity forward and benefit Canadian businesses and consumers alike. Competition can improve productivity in three ways: 

1. Efficient use of resources: firms facing intense competitive pressure are likely to use their labour and resources more efficiently than those facing slack competition 

2. Innovation: competition encourages firms to innovate and invest in new products and processes to gain a competitive edge on their rivals, and 

3. Keep markets productive: healthy competition squeezes out lower-productivity firms and allows higher-productivity firms to thrive” 

   
   

The Bureau states that competition pushes individuals, firms and markets to make the best use of their resources, and to think of new ways of doing business and winning customers. As a result, productivity and Canadians’ standard of living increases.  

Additionally, competition makes goods and services more attractive to Canadian consumers and foreign buyers, which increases the competitiveness of Canadian exports, expands our output, and increases the economic benefits for Canadian workers, businesses, and investors. 

The Bureau also points out that competition is good for consumers too—it benefits Canadians by keeping prices low and keeping the quality and choice of products and services high. In this way, businesses must produce and sell the products that consumers want, and they need to offer them at prices that consumers are willing to pay. Consequently, consumers are still in the driver’s seat and are not forced to buy goods at unfair prices. 

The Federal Trade Commission also explains the following: 

“The FTC takes action to stop and prevent unfair business practices that are likely to reduce competition and lead to higher prices, reduced quality or levels of service, or less innovation. Anticompetitive practices include activities like price fixing, group boycotts, and exclusionary exclusive dealing contracts or trade association rules, and are generally grouped into two types: 

• agreements between competitors, also referred to as horizontal conduct 

• monopolization, also referred to as single firm conduct”