Mark Zuckerberg, the highest-profile witness in a US Federal Trade Commission lawsuit seeking to break up Meta Platforms, offered testimony this week that will help the agency’s attempt to push forward a privacy-focused antitrust angle of attack that the US Department of Justice unsuccessfully deployed in an ongoing monopolization trial against Google that will soon be playing out in the same courthouse.
While US District Judge Amit Mehta found Google illegally monopolized the Internet search market following a 2024 liability trial (see here), he rejected arguments from the DOJ and state plaintiffs that Google’s willingness to ignore the privacy challenge presented by DuckDuckGo was evidence of monopoly power (see here).
The DOJ failed to marshal enough evidence to convince Mehta that Google could shun real user privacy concerns because it is a monopoly. It might well be, the judge concluded, that Google recognized it was giving users what they wanted by ranking search quality above privacy.
The FTC is now hoping to use the biggest privacy scandal in history, Cambridge Analytica, to prove that even though Facebook users were upset about their data being shared, it didn’t affect the tech giant because it, too, is a monopoly.
— Quality-adjusted price —
This week, the FTC kicked off its case with an effort to prove the effect of Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 was anticompetitive (see here). Those mergers were previously cleared by the FTC.
Another key challenge for the FTC in the case will be showing that Meta possessed and exercised monopoly power in a market where the product price is effectively zero.
“Even with zero-price products, however, a monopolist can increase the ‘quality-adjusted price’ by degrading the quality of the product while keeping prices constant (at zero),” US District Judge James Boasberg wrote in his summary judgment opinion that sent the case to trial (see here).
Boasberg said an increase in the quality-adjusted prices of Meta’s products could be shown in several ways: a decrease in privacy, an increase in the amount of advertisements served to users, or even specific targeting of “core” users based on indications that they are unlikely to go elsewhere despite declines in the quality of their experience.
Meta’s privacy failures illustrate a reduction in competition that has harmed consumers to this day, the FTC claimed in its opening arguments. But it still needs to prove those claims.
Insufficient evidence was part of the problem for the DOJ’s privacy-related arguments in the Google case, with Mehta finding that the evidentiary record supported the plausibility that the tech giant was taking consumer preferences into account when navigating trade-offs between search quality and user privacy.
The FTC has not come empty-handed when attempting to answer the call for evidence that Meta’s users are dissatisfied overall across a range of metrics, including the number of ads, reliability, ease of use and control over personal information.
Meta has increased the so-called “ad load” on users over time, former Meta Chief Operating Officer Sheryl Sandberg testified this week (see here).
But she justified the move by saying that an increase in ad quality gave Meta an opportunity to make more money in a way that didn’t harm users.
That take clashes with a 2021 document quoted in a slide from the FTC’s opening arguments that purports to show that consumers “express that their concerns about privacy and data collection outweigh any potential benefits” of targeted advertising.
“Privacy has consistently been the top-rated area users want Facebook to improve,” according to a document from 2016 cited by the FTC.
“[W]e agree, stalking isn’t cool; but being able to know what’s going on in your friends’ lives is,” Zuckerberg said in a 2006 blog post entered into evidence bearing the title, “Calm down. Breathe. We hear you.”
That post, which features Zuckerberg reassuring Facebook’s users that “We didn’t take away any privacy options” and “The privacy rules haven’t changed,” shows that privacy has been something users care about since the start of the social network.
The FTC’s opening arguments also included a list of Meta’s “significant privacy breaches and penalties:”
- Cambridge Analytica breach (2018) (see here)
- Record-breaking FTC penalty of $5B (2019) (see here)
- $650M settlement over use of facial recognition (2020) (see here)
- $1.4B settlement over biometric data capture and use (2024) (see here)
— Cambridge Analytica —
Perhaps the most noteworthy piece of evidence purporting to show Meta’s monopoly power that was flagged by the FTC during opening arguments included the results of a rigorous internal Meta investigation into the fallout of a massive 2018 data privacy scandal involving UK political data-mining company Cambridge Analytica (see here).
That scandal was based on Facebook’s policy, prior to 2015, that apps on its platform had access not only to the personal data of users who downloaded the app, but also to the data of their Facebook friends. The Cambridge Analytica matter erupted into a global scandal after a rogue app developer, whose personality quiz app was downloaded by fewer than 300,000 people, gained access to the data of about 87 million Facebook users and conveyed it to Cambridge Analytica.
While Meta settled private class-action litigation in that case for a record $725 million in 2023 (see here), litigation by a group of state attorneys general over Cambridge Analytica remains active (see here).
The purported results of Meta’s internal investigation following the 2018 scandal — that Facebook’s engagement and revenues were “unimpacted” and were unlikely to be impacted in the future from similar scandals — rub against the grain of trial testimony from Zuckerberg acknowledging that privacy is one element of competition between online applications (see here).
One important datapoint included in this internal report is the “relative cares about users” metric, or RCAU. During questioning about the report, Sandberg described RCAU as a “user sentiment” metric seeking to answer the question: “Does Facebook care about its users?”
The FTC argues that such user sentiment metrics are an “appropriate competitive benchmark,” and whether the judge in the case agrees will be a big deal.
“Only when a firm exceeds benchmarks and earns money doing so is there monopoly power,” Meta attorney Mark Hansen told the court during opening arguments. “There will be no such evidence in this case.”
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By Chris May and Mike Swift
April 18, 2025, 18:21 GMT | Comment
Mark Zuckerberg, the highest-profile witness in a US Federal Trade Commission lawsuit seeking to break up Meta Platforms, offered testimony this week that will help the agency’s attempt to push forward a privacy-focused antitrust angle of attack that the US Department of Justice unsuccessfully deployed in an ongoing monopolization trial against Google that will soon be playing out in the same courthouse.