Meta Platforms and the Federal Trade Commission wrapped up a monopolization trial after more than six weeks of testimony, with the tech giant seeking to strike the testimony of the FTC’s main economic expert over “bias and prejudgment” while grilling him over feeding advice to government counsel years ago on a “litigation strategy” against the company.
Meta Platforms and the Federal Trade Commission wrapped up a monopolization trial after more than six weeks of testimony, with the tech giant seeking to strike the testimony of the FTC’s main economic expert over “bias and prejudgment” while grilling him over feeding advice to government counsel years ago on a “litigation strategy” against the company.The lawsuit, which was brought four-and-half-years ago under the first Trump presidency, ended today in its seventh week. The FTC is asking US District Judge James Boasberg to unravel Meta’s 2012 and 2014 acquisitions of Instagram and WhatsApp respectively for being “exclusionary” and “anticompetitive” transactions.
Kevin Huff, counsel for the social media giant, grilled professor Scott Hemphill who was called back to the witness stand as part of the FTC’s rebuttal case.
He brought up a slide deck of a road show in 2019 in which Hemphill, along with former White House competition advisor Tim Wu, made a presentation. Hemphill testified to setting out a potential antitrust case consistent with their academic work about nascent competitors.
“Is it fair to say that you did much more than draw attention to an investigation that might be appropriate. You not only advised the FTC on what claims to bring, you also advised the FTC on litigation strategy, right?” Huff asked the FTC expert during cross-examination. Hemphill said that is not accurate.
The Meta counsel argued that Hemphill and Wu’s slide deck presentation was on June 11, 2019, and that a week later, on June 18, the FTC opened its investigation. Hemphill said he wasn’t aware of the chronology of events. Huff quizzed the FTC expert about two slides in the deck that were only recently shared with Meta, one of which was titled: “Developing the Facts: Proposed Next Steps.”
“Interview founders of acquisition targets and rival acquirers,” the slide said and listed the names of Instagram’s co-founder Kevin System and Mike Krieger as well as WhatsApp co-founders Brian Acton and Jan Koum. It was suggested the FTC interview Twitter executives and noted that they were a “rival acquirer of Instagram.”
“Consider friendly subpoena,” one of the bullet points on the slide said, followed by: “Goal: what is their understanding of the effects Facebook’s acquisition proposal? As articulated/understood at the time, as articulated/understood later.”
Huff zeroed in on the “friendly subpoena,” asking Hemphill to explain his thinking over suggesting that as a strategy to the FTC.
“This is going back, but the idea was probably that, whereas people might not want to talk voluntarily, consistent with an NDA [nondisclosure agreement], let's say that receiving a subpoena would have a kind of twist one's arm effect, is what I imagine,” the FTC expert replied.
“The FTC took your litigation advice, right?” Huff asked.
Hemphill said that given the timing of the investigation, “I seriously doubt it, but I don't know one way or the other.”
“You know that the FTC interviewed or deposed all of the people or entities on this list, right?” Huff continued his line of questioning.
Hemphill replied that’s right, “though it's hardly brain surgery to talk to all the founders, and Twitter executives... So, I very seriously doubt, though I have no idea either way, that these suggestions made any difference.”
— Litigation strategy, injunction advice for FTC —
Persisting with the 2019 slide deck, the Meta attorney quizzed Hemphill about his warning to FTC counsel that if Meta was able to integrate its messaging services, it would make it more difficult for the FTC to break up the social networking giant. Hemphill agreed and said that he “suggested” FTC attorneys seek a preliminary injunction to prevent Meta from integrating its messaging services “as one among a whole bunch of ideas.”
The slide carried the heading “Preliminary Injunction.” It was followed by bullet points which said, “In January 2019, Facebook announced a plan to integrate the messaging services of Instagram, WhatsApp and Facebook (Messenger),” and “one anticipated (and possibly intended) effect of the integration is to make divestiture more difficult” and “a preliminary injunction may be necessary or desirable to prevent this merger and maintain the status quo.”
Hemphill said it was a “preliminary examination of a legal idea” that grew his and Wu’s academic work, and which had a particular application to a completed transaction.
But Huff went back to the slide deck which read, “a PI [preliminary injunction] posture may be attractive for litigating the merits of the acquisitions.”
“So, you were advising the FTC on the litigation strategy of a preliminary injunction posture for litigating the merits of the acquisitions of Instagram and WhatsApp, right? You were giving the FTC litigation strategy advice, right?” Huff asked.
Hemphill pushed back saying he certainly does not think of it that way.
The Meta attorney continued pressing Hemphill further, asking if the FTC deciding whether to sue for a preliminary injunction and why, is a legal question or a legal conclusion. Hemphill fumbled, saying, “I don't know if I think of as a legal question or not. It's certainly removed from the economic testimony I’m offering in this case.”
Huff asked the FTC expert again if he was aware that the FTC acted on his litigation strategy advice. Hemphill said, “I really don't think so. No.”
“Are you aware that on July 9, 2019, just a few weeks after your presentation, the FTC requested detailed information from Meta about Meta’s plans for integrating its messaging services?” Hemphill said no.
“You recommended a litigation strategy that was too aggressive, even for the FTC. Is that fair?”
“No, I don't think that's fair,” Hemphill responded.
— ‘Preconceived notions’ —
The Meta attorney confirmed with the expert that he was retained as an economic expert in the lawsuit in 2022, less than two years after it was filed in December 2020.
“You testified that before this case began, you did not have preconceived notions about Meta’s liability, right?” Huff asked.
The FTC expert said “that’s fair” but that he had a preliminary view, based on the information that he had at the time and that there was sufficient concern in Meta’s conduct to merit an investigation. “But I didn't have the information that I would need to reach a conclusion, nothing like the work I ultimately did as an economic expert,” Hemphill replied.
“But the truth is that before the FTC hired you, you had already concluded that meta was a monopolist, right?” Huff asked.
“Well, not in the sense that it would mean in an economic opinion. I thought that there was evidence in the public domain that was consistent with being concerned about monopoly,” Hemphill said.
Huff asked the same question and received a similar response, at which point he put up a slide showing a Dec. 10, 2020, blog post on the site “Medium” titled, “Three things the press keeps getting wrong about the Facebook antitrust case.” The authors were Wu and Hemphill and was posted a day after the FTC brought its lawsuit against the company.
Reading from the blog post, Huff said, “These were acquisitions, speaking about Instagram and WhatsApp, that were by a monopolist of its direct competitors, or nascent competitors with abundant evidence of anticompetitive intent.”
“That's what you wrote. Those were your words, correct? You formed these opinions before you were hired as an expert in this case, right?” Huff asked,
“Well, yes,” Hemphill replied, noting that back in 2019 he offered a preliminary view “which is obviously not an economic opinion.” The FTC expert said it was based on the evidence available in the public domain that supported, according to him, the view that “there was something to worry about here.”
Huff ended his cross-examination and addressed the judge, saying, “Your Honor, based on the testimony at this trial, we intend to move to strike Professor Hemphill’s testimony on grounds of bias and prejudgment.”
Meta would like to request a briefing schedule at a later time, he said.
— FTC tries to salvage Hemphill testimony —
Krisha Cerilli, counsel for the FTC, had a short redirect examination of Hemphill in which he said he did not reach decisions about Meta’s behavior prior to conducting his analysis.
“So, do you know one way or the other whether the FTC investigation was already ongoing when you met with the FTC on June 11?” the government attorney asked.
“I have no idea when the investigation was made or started,” Hemphill replied.
The FTC expert was then asked if he had had any contact with the FTC from June 11 to the date that the agency voted out its complaint in December 2020. Hemphill said he did not recall but that there are other things with the FTC that he works on from time-to-time, so there may well have been interactions, “but have nothing to do with this.”
Boasberg has already set a post-trial briefing schedule. The FTC's opening brief is due July 2 and Meta's opening brief is due Aug. 6, 2025. The FTC's reply and opposition, including a proposed findings of fact relating only to Meta's affirmative defenses, is Aug. 27. Meta's reply, relating only to its affirmative defenses, is due Sept. 10.
Today, Boasberg also ordered video testimonies of four third-parties to be shown to the media. The judge had already watched the deposition videos mid-trial in chambers.
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