Google recently dodged corporate dismemberment in US federal court, in part, thanks to one District of Columbia federal judge’s “hope” that AI industry innovation will prevent the need for what he described as “an incredibly messy and highly risky break-up” that the US Department of Justice proposed as a solution to the tech giant’s monopolistic conduct in Internet search and search advertising markets. The decision is likely welcome news for Meta Platforms, which is banking on arguments about AI innovation in its fight against a break-up bid from US Federal Trade Commission antitrust litigation targeting Facebook’s acquisitions of WhatsApp and Instagram.
Meta Platforms likely took note when Google recently dodged potential corporate dismemberment by a US federal court, in part thanks to a District of Columbia federal judge’s “hope” that AI industry innovation will prevent the need for what he described as “an incredibly messy and highly risky break-up.”The US Department of Justice had proposed cleaving off Google's web browser and mobile operating system as a solution to the tech giant’s monopolistic conduct in Internet search and search advertising markets.
Meta is also banking on AI innovation in its own fight against a break-up bid from the US Federal Trade Commission in antitrust litigation targeting Facebook’s acquisitions of WhatsApp and Instagram.
US District Judge Amit Mehta’s 230-page ruling earlier this week (see here and here) in the DOJ’s case will provide plenty of food for thought to his colleague James Boasberg, who is currently pondering whether a different flavor of AI innovation should sink the FTC’s case.
During several weeks in May when Mehta and Boasberg tended to overlapping landmark antitrust trials where the DOJ and FTC defended their bids to break up Google and Meta, Mehta told MLex he didn’t have much time to keep up with what was happening outside his own courtroom.
But when Boasberg allowed the FTC’s antitrust claims against Meta to go to trial after a DC appeals court snuffed out a similar case from US attorneys’ general (see here), he relied on precedent from Mehta’s findings in the Google case to justify moving forward (see here).
One key distinction between the Google and Meta cases is that Google has already been hit with rulings finding it liable for antitrust violations in multiple markets (see here, here and here).
Another significant difference is that the DOJ sought to break off Google’s homegrown browser, Chrome, and mobile operating system, Android.
The FTC, by contrast, seeks to unwind two Facebook acquisitions which the agency previously approved more than a decade ago by claiming they were part of a broader course of conduct that illegally cemented Meta’s social media monopoly.
Google is broadly expected to appeal the rulings in both DOJ-led cases, which have already provided fodder for follow-on private litigation taking aim at other alleged harms from the company’s market dominance.
In a couple of weeks, the company will face a separate remedies trial over a break-up bid from the DOJ in the Eastern District of Virginia, where District Judge Leonie Brinkema will decide how to deal with Google's anticompetitive conduct in markets for digital advertising technologies (see here).
Meanwhile, the EU’s top competition cop today floated a breakup of Google’s adtech businesses after political tensions with the US postponed a 2.95 billion euro antitrust fine (see here, here and here).
Back in the US, Meta is still duking it out with the FTC over a basic question about whether the tech giant’s dominance over social media can be linked to illegal, anticompetitive conduct.
But both tech giants have attempted to fend off government antitrust enforcement with stories about AI’s game-changing impacts on competition in the digital markets where they allegedly exercise unrestrained monopoly power.
“We’re not going to comment on that,” FTC spokesperson Joe Simonson told MLex when asked whether the Google decision would put wind in the sails of Meta’s defense against the agency’s attempt to force divestitures of WhatsApp and Instagram.
The DOJ and Meta each declined to comment.
Boasberg and Mehta did not respond to requests for comment.
— Google —
Among the “fruits” of Google’s unlawful, multibillion-dollar web search distribution agreements, Mehta said in his remedy order, were “astonishing” revenue growth and more than a decade of freedom from “any genuine competition” to restrain the company’s pricing of search text advertising.
But the judge declined to prohibit those same agreements — including an advertising revenue sharing arrangement with Apple that one Morgan Stanley analyst recently pegged as a “$25B+ annual revenue business ... with 95%+ margins” — partly because of a different flow of money Mehta also found “astonishing.”
“Today, established technology companies are making, and start-ups are receiving, hundreds of billions of dollars in capital to develop [generative AI] products that pose a threat to the primacy of traditional internet search,” Mehta said in his ruling.
“These new realities give the court hope that Google will not simply outbid competitors for distribution if superior products emerge,” he said.
While market forces had yet to crack open Google’s dominant grip over search, the judge said, AI technologies developed by companies such as Meta, Microsoft, OpenAI, DeepSeek, Perplexity, Anthropic and xAI “may yet prove to be game changers.”
During a White House dinner this week featuring dozens of top Silicon Valley power players, US President Donald Trump congratulated Google Chief Executive Sundar Pichai on the “very good day” his company had as its stock climbed about $230 billion in the wake of Mehta’s antitrust ruling.
An e-mailed statement from one of the Biden administration’s top antitrust cops shared broadly with journalists in the wake of the Google search decision lacked the triumphant tone one might expect from a former government official who helped lead the agency toward its landmark monopolization win against one of the world’s most wealthy and powerful corporations.
According to Doha Mekki, the former number-two at the DOJ’s Antitrust Division, Mehta’s ruling offers an “unmistakable lesson” for big companies facing antitrust decisions: “[I]f they can stick it out, even a monopoly liability finding may not meaningfully constrain them in the future.”
Mekki warned in 2023 that calls for regulation from the likes of OpenAI Chief Executive Sam Altman echoed earlier communications and regulatory risk strategies from Big Tech that allowed Google to grow into a monopoly in the first place.
"Companies were very good at saying, ‘Don't use antitrust, that's the sledgehammer. Just regulate us,’” she said at the time.
Last month, Altman told reporters that even though advances in artificial intelligence were “the most important thing to happen in a very long time,” irrational exuberance from investors was likely fueling a market bubble akin to frothy investments in Internet-based companies during the late 1990s that ultimately led to a stock market crash.
— Meta —
AI’s power to reshape digital markets featured extensively in testimony from Meta executives during more than six weeks of trial proceedings in April and May in the District of Columbia.
“Look at the adoption of AI” Meta’s top marketing executive, Alex Schultz, said. “AI was nothing two years ago. In the US it has a couple hundred million active people using AI. The technology industry shifts fast.”
Boasberg’s written rulings and questions to trial witnesses indicated he was receptive to the idea that digital markets move fast. But his summary judgment ruling also noted the irony behind Meta’s argument “that the market with which it was once nearly synonymous does not even exist.”
Advances in machine learning technologies are a key ingredient fueling fierce competition among digital content providers in a broad market where platforms rely on AI-powered content recommendation engines to convert time spent staring at screens into billions of dollars in annual advertising revenue, according to Meta.
A major reason to reject the FTC’s proposed antitrust market for “personal social networking services” that facilitate online connections with family and friends, Meta argued, is that the core use cases of products from companies which previously focused on specific “jobs to be done” for users have now “converged” into platforms with diverse but similar features that constrain Facebook and Instagram’s pursuit of “marginal minutes.”
But Boasberg must also reckon with the darker side of evidence introduced during trial that illustrated how Meta relies on thousands of AI models to filter tens of billions of pieces of content into personalized feeds for its roughly quarter-billion US users — all while attempting to weed out child porn, terrorist propaganda and more than two dozen other categories of harmful or objectionable materials.
The FTC’s trial evidence included internal company documents that revealed how company algorithms connected hundreds of thousands of children with “groomers” (see here) enabled top executives to boost the saturation of advertisements on Facebook and Instagram feeds to meet Wall Street revenue targets (see here), and powered a staggering system of corporate surveillance.
During trial testimony from Curtiss Cobb, a Meta research vice president overseeing a centralized group of approximately 65 social scientists whose expertise informs research across the company’s family of apps, the FTC introduced documents showing how the company is able to leverage internal surveys and troves of behavioral data from Facebook’s billions of global users to provide senior leaders with user sentiment analyses that filter opinions on social issues based on users’ “predicted ideology.”
Support for breaking Facebook up into smaller companies among registered voters in the US continued a downward trend across partisan groups, a slide deck from 2022 said, suggesting the trend may be related to “voters hearing less about breaking up Meta.”
If the judge determines that AI innovations haven’t prevented a meaningful decline in the quality of the features and advertising underpinning social media user experiences — a vital question in markets where the allegedly monopolized product is zero price (see here) — that could open the door to a ruling that transforms claims of AI innovation from a shield for alleged monopolists into an antitrust albatross.
— Past monopolization —
Meta has sought to move on from the era when Facebook’s internal motto was “move fast and break things.”
But even if the company’s rise from a dorm-room startup to a multinational tech giant included a period where it dominated the market for facilitating online connections between family and friends through social media, the FTC has failed to show the company is breaking federal antitrust laws right now, Meta argues.
“The evidence decisively demonstrated that Meta — once an online ‘Facebook’ for connecting students — has evolved into a diverse global provider of entertaining and informative content that competes with increasingly similar social apps including TikTok, YouTube, iMessage, and others,” Meta said in its post-trial briefing.
Being too slow on the draw has already doomed a separate social media monopolization lawsuit against Meta, brought by the top law enforcers from New York and 47 other states (see here and here).
Now the FTC must overcome AI hype as it attempts to avoid a similar fate.
“Meta is correct that the FTC must prove that it is currently violating the antitrust laws,” US District Judge James Boasberg said in an April order allowing the company to present at trial usage data for Facebook and Instagram that includes a January 2025 TikTok outage (see here).
While Meta disputes the FTC’s allegation that Facebook became a social media monopolist around 2011, Boasberg also faces another important question: if Meta did in fact dominate personal social networking services at one point, has that dominance since been eroded by competition to the point that the company is not currently violating Section 2 of the Sherman Act?
“In line with this Court’s prior rulings, the FTC proved at trial that Meta is currently in violation of Section 2,” the agency said in a post-trial briefing last month (see here). “However, the FTC’s request for prospective relief does not require proving a current violation.”
The subtle distinctions emphasized by the agency’s italicized language are a high-stakes hedge from Trump’s antitrust enforcers. Even if Meta somehow lacked monopoly power as of trial, “the FTC may prevail on liability by proving pre-trial violations of Section 2,” it said.
Meta’s response is that Boasberg's previous rulings in the case have foreclosed that argument.
“As this Court has twice ruled, 'the FTC must prove that [Meta] is currently violating the antitrust laws,'” the company said, pointing to Section 13(b) of the FTC Act, which Meta said requires the FTC to prove an ongoing or imminent violation and is “not a mere pleading standard.”
The FTC’s post-trial briefing “all but acknowledges” the agency can’t carry its burden to prove Meta is currently violating the antitrust laws, the company said. The idea that “past monopolization” is sufficient is “legally incorrect,” it added.
Whether or not the FTC prevails, Boasberg’s ruling will be a landmark decision for courts that are grappling with complex legal questions about the competitive landscape for technology companies that are increasingly betting that autonomous machine learning systems will deliver innovative and valuable products and services.
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