FTC v. Meta Platforms—Market Definition in Rapidly Changing Industries: Where Heraclitus Meets Antitrust

On November 18, 2025, a U.S. District Court issued its long-anticipated opinion on the FTC’s lawsuit against Meta Platforms (“Meta”), which alleged that Meta unlawfully maintained monopoly power in the market for personal social networking by acquiring Instagram and WhatsApp to eliminate them as competitive threats. The Court held that the FTC had failed to meet its burden to prove Meta’s monopoly power in a relevant market and ruled in favor of Meta. Opinion at 2.

The case took nearly five years to reach a final judgment after the FTC filed its initial complaint in December 2020, when Meta still called itself Facebook. The FTC alleged that Facebook had possessed monopoly power in the U.S. market for personal social networking since at least 2011 and unlawfully maintained that monopoly by acquiring Instagram and WhatsApp to “squash” the competitive threat they posed. Opinion at 20. Those acquisitions occurred in 2012 and 2014, respectively, and the FTC did not challenge either at the time. Opinion at 20.

Meta’s primary defense was that it lacked monopoly power because it competes in a broader social media market that includes other major platforms such as TikTok and YouTube. Opinion at 1-2. Meta further argued that its acquisitions of Instagram and WhatsApp benefited consumers. Opinion at 2. The Court, however, did not reach that argument; it ruled for Meta solely on market definition and monopoly power grounds. Opinion at 21.

The Court’s opinion capped several years of high-profile litigation, which spanned three presidential administrations (Trump I, Biden, and Trump II) and largely focused on acquisitions that occurred more than a decade ago. While the final judgment was years in the making, the Court earlier signaled that the FTC had a “tall task” and faced “hard questions” to prove Meta’s monopoly power within a properly defined market. Opinion at 20-21 (citing FTC v. Facebook, Inc., 581 F. Supp. 3d 34, 40 (D.D.C. 2022); FTC v. Meta Platforms, Inc., 775 F. Supp. 3d 16, 30 (D.D.C. 2024)).

A. The Court's Focus on Current Market Conditions

The Court’s focus on how the market has evolved over time is notable for litigants in both private and government actions. The Court’s analysis hinged on a critical legal determination: that the market for personal social networking and Meta’s market power should be evaluated based on current market conditions, rather than the state of the market when Meta acquired Instagram and WhatsApp. Opinion at 22-24.

The Court had already held in prior rulings that the statute authorizing the FTC to seek injunctions, Section 13(b) of the FTC Act, requires the FTC to “prove that Meta is violating the law now.” Opinion at 23 (emphasis in original) (citing 15 U.S.C. § 53(b)). In this opinion, it addressed the FTC’s post-trial argument that it could obtain an injunction to redress lingering harm if “Meta broke the law in the past and this violation is still harming competition.” Opinion at 23. Relying on the text of Section 13(b) and case law emphasizing the statute’s “forward-facing role,” the Court held that the FTC “must prove a current or imminent legal violation,” which requires proof that “Meta has monopoly power now.” Opinion at 23-24 (emphasis in original).

That legal determination framed the Court’s emphasis on how dramatically the social media landscape has changed over the last decade. Opinion at 1 (“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”); Opinion at 89 (“Whether or not Meta enjoyed monopoly power in the past, though, the agency must show that it continues to hold such power now. The Court’s verdict today determines that the FTC has not done so.”). The Court ended its opinion with references to Heraclitus’s river—the one you can’t step in twice—emphasizing just how differently the “world of social media” looks today than it did when the FTC brought this lawsuit in 2020. Opinion at 1, 89. The Court repeatedly returned to the themes of “change” and “evolution," describing the various shifts that combined to create a “tectonic transformation.” Opinion at 11-14.

While the Court’s timing ruling rests on the text and interpretation of Section 13(b)—and thus does not apply to the DOJ or private plaintiffs—the focus on changes in the marketplace presents a key lesson for all antitrust litigants: treat markets as static at your own risk.

When cases hinge on the time frame used to evaluate market conditions, developing a clear record of how the market has changed—and is likely to continue to change—can be make-or-break in determining the proper boundaries of a relevant market and assessing market power.¹ The Court cited to specific facts in describing the “shifts” that have transformed the competitive landscape in social media, and the opinion’s repeated emphasis on “change” and “transformation” in the marketplace can be cited by defendants across various dynamic industries.

The Court concluded its opinion with this observation: “Like Heraclitus’s river, the rapids of social media rush along so fast that the Court has never even stepped into the same case twice.” Opinion at 89. To illustrate just how fast, the Court noted that its 2021 and 2022 motion to dismiss decisions “did not even mention the word ‘TikTok’”—while today TikTok is “Meta’s fiercest rival.”

The lesson, perhaps, for the FTC, is to move quickly before a fast-moving market shifts away from the framing most favorable to its case or forego challenging old mergers. The federal agencies are not bound by any statute of limitations in seeking injunctive relief, but changing market conditions and difficulties with remedies can serve as practical barriers to challenging mergers long after they were consummated.

For defendants, the lesson is to spotlight the flaws in the plaintiffs’ market definition as early and often as possible, because a small ripple of change could easily become a giant wave, providing the court with a reason to dismiss a market definition that is already outdated by the time the court is ready to rule.

B. No Section 7 Claim, but Court still Focuses on Market Definition

Although this case was technically a Sherman Act Section 2 case, the Court’s analysis of the market definition issue is likely to carry significant persuasive value in future merger challenges under Section 7 of the Clayton Act as well.

The FTC challenged Meta’s acquisitions of Instagram and WhatsApp under Section 2 of the Sherman Act, alleging unlawful monopolization; it did not pursue claims under Section 7 of the Clayton Act, which prohibits acquisitions that may substantially lessen competition or tend to create a monopoly. Although both claims require a properly defined market, Section 7’s “incipiency” standard carries a lower threshold for liability than Section 2. See 2023 Merger Guidelines § 1 (“Section 7 was designed to arrest anticompetitive tendencies in their incipiency.”) (citations omitted).

Section 2 requires a plaintiff to prove that the defendant possesses monopoly power, which generally requires at least 65% to 70% market share. Opinion at 86-87 (citations omitted). Section 7, on the other hand, only requires that the “effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly” “in any line of commerce.” 15 U.S.C. § 18. Courts often treat the DOJ and FTC Merger Guidelines as persuasive authority and consult their structural thresholds to support a presumption that a merger may “substantially lessen competition.” See, e.g., 2023 Merger Guidelines § 2.1 (defining thresholds for presumption that a merger may substantially lessen competition); Fed. Trade Comm'n v. Tapestry, Inc., 755 F. Supp. 3d 386, 459 (S.D.N.Y. 2024) (finding the 2023 Merger Guidelines are “persuasive” for evaluating changes in market concentration).

While the outcome may not have differed had the FTC also brought a Section 7 claim, the agency did not explain why it relied solely on Section 2’s stricter standard. The FTC’s decision may have been at least partially motivated by the fact that the agency had chosen not to challenge either acquisition before they were consummated despite having an opportunity to do so. Such a challenge would have been under Section 7, so the FTC would have had to defend why it was bringing a Section 7 claim when it declined to do so before. And it still ultimately had to overcome this tension; as the Court noted, “the FTC approved both acquisitions at the time” and then “years later, changed its mind.” Opinion at 20.

C. The Court’s Analysis of Whole Foods Decision²

The Court’s opinion also helped clarify the proper interpretation of past D.C. Circuit Court precedent regarding the recognition of “sub-markets.”

After determining that TikTok and YouTube also competed in the same social media market as Meta, Opinion at 76-77, the Court then rejected the FTC’s attempt to carve out a submarket consisting of users who 1) “care[] especially about friend sharing,” 2) purportedly have no substitute for Facebook and Instagram, and 3) whom Meta allegedly exploits by targeting with a higher ad load. Opinion at 77. The FTC relied on FTC v. Whole Foods Mkt. Inc., 548 F.3d 1028 (D.C. Cir. 2008) for this argument.

The Court was quick to point out that relying on the Whole Foods decision was itself problematic, regardless of the substance of that opinion. In Whole Foods, the Court found that “premium natural and organic supermarkets” formed a distinct product market because a segment of “core customers” would not substitute conventional grocery stores for stores like Whole Foods. It reasoned that these captive customers tolerated higher prices, showing that Whole Foods effectively exercised market power over them. The Court noted, however, that Judge Brown’s opinion “did not command a majority,” “has never been adopted by the D.C. Circuit,” and in context served only to show that the FTC had raised “serious enough questions. . . as to make them fair ground for. . . a more thorough investigation in a Section 13(b) case for a preliminary injunction. Opinion at 77-78.

On the merits, the FTC argued—by analogy to Whole Foods—that a subgroup of Facebook and Instagram users who value seeing friends’ posts constitutes a separate “friend-sharing” market. On this theory, Meta could “price discriminate” against those users by loading their feeds with more ads. Opinion at 78. But unlike groceries, Facebook and Instagram are free. The only “price” variation is ad load, which evidence showed varied only modestly, did not track users’ friend-sharing preferences, and—when stripped away entirely—yielded only small increases in usage. Opinion at 78. Meta’s internal documents confirmed that low ad loads on new features (e.g., Reels, the Friends tab) reflected their novelty, not targeted protection of “friend-sharers.” The Friends tab, which surfaces exclusively friends’ content, currently carries no ads at all. Opinion at 81.

Given that carving out a separate market requires the ability to charge a significantly higher price (or the quality-adjusted equivalent), and there was no evidence that Meta practices price discrimination based on friend-sharing intensity, the Court rejected the Whole Foods analogy. Opinion at 81. In doing so, it demonstrated that establishing submarkets requires rigor and detailed analysis.