Are you surprised that this case is here? Which is to say that one of the things we've seen over the last couple of months is that Mark Zuckerberg has made a very aggressive effort to get closer to this president. He's been very supportive of this president. There have been some speculation that behind the scenes, he was pushing [00:00:17] for some kind of settlement or for the case effectively to get withdrawn. I'm glad to see that it's gotten to this point, and that the various efforts by Facebook and Mark Zuckerberg to make the case go away on the eve of trial were not successful. [00:00:34] So it's on. It's been a long time coming, but the Federal Trade Commission's antitrust lawsuit against meta, which was kicked off during the first Trump administration, finally began yesterday. So he couldn't avoid it all together. Mark Zuckerberg has tried very hard to convince the second Trump [00:00:51] administration to drop the case, but so far as you heard there, no luck. We're about to break it all down in detail, but Jank, I understand that. And sometimes you surprise us. You have potentially controversial take on on all of this. [00:01:07] Yeah. Me with a controversial, surprising take. Never. Yeah. I think I'm on Meta's side on this. I don't think that they need to be broken up. I'm going to explain why, after you give us all the details here. When they showed your picture there, it looked like, you know, when someone's [00:01:24] eating the canary or something and there's little feathers coming out of its mouth. It's kind of. You just had that look on your face. So here we go. Here's what you need to know about it. As I mentioned, the case was brought in 2019. It was thrown out by a judge there was that, revamped, refiled [00:01:40] by the Biden era FTC and is only now going to trial FTC arguing that Facebook used a buy or bury strategy, kind of forcing the hand to acquire Instagram and WhatsApp for $1 billion and $19 billion, respectively. [00:01:57] Those acquisitions, according to the FTC, choked out competition in the market illegally created a social media monopoly. If the agency is successful, meta could be forced to divest from Instagram and WhatsApp. FTC is using statements from none other than Zuckerberg himself [00:02:15] to make the argument, and he actually had to take the stand yesterday. I bet that was interesting. In his opening remarks, Daniel Matheson, the FTC's lead litigator in the case, mentioned documents including what he described as a, quote, smoking gun February 2012 email in which Zuckerberg discussed the rise [00:02:34] of Instagram and the importance of, quote, neutralizing a potential competitor. New York Times with that detail. Another email November same year, 2012, to Sheryl Sandberg, the chief operating officer at the time. [00:02:50] Zuckerberg wrote, this messenger isn't beating WhatsApp. Instagram was growing so much faster than us that we had to buy them for 1 billion. FTC showed Zuckerberg a 2011 email in which he wrote, quote, we really need to get our act together quickly on this. [00:03:07] Since Instagram is growing so fast now, there is one potential obstacle for the FTC in this. They must successfully argue meta would not have achieved the same success without acquiring Instagram and WhatsApp and Facebook. [00:03:24] And it's hard to prove that hypothetical scenario because, here's the other rub for the FTC. According to meta, the company has a lot more competition than what the FTC is claiming. FTC argued, Zuckerberg said in 2006 that Facebook was used [00:03:43] to connect actual friends. The agency has argued that meta has had a monopoly in social networking since 2011, and that Snapchat was among the only comparable platforms to Facebook and Instagram. Meanwhile, meta is counting TikTok and YouTube among its competitors. [00:04:01] Connecting friends and family is one of the core things the company does, Zuckerberg said. But meta is also involved in the general idea of entertainment and learning about the world and discovering what's going on. Mark Hansen, Meta's lead litigator, said more than half of all engagement [00:04:18] on Facebook and Instagram involve videos which put meta squarely in competition with TikTok. Fastest growing short video app. When TikTok was momentarily shut down in January, meta saw a surge of use on Facebook and Instagram, as did Google's YouTube, which showed the company [00:04:38] had plenty of competition, he said. Andrew Ross Sorkin grilled Lina Khan on the specifics of the case, so let's watch that now. What do you think of the argument that this is a case that is in the rear view mirror? You have to remember that Facebook had actually done well for itself in [00:04:56] the desktop market, but it was actually, as smartphones were taking on that, Facebook struggled to innovate and make that transition. And that's the moment at which it panicked. It saw companies like Instagram and WhatsApp experiencing astronomical growth. [00:05:11] And that's the point at which it resorted to this buy or bury scheme. In a world of AI where all of a sudden OpenAI and ChatGPT, which basically didn't exist at the time, Gemini didn't exist. Anthropic. All of these things ex in its current formation. [00:05:26] Again, TikTok. These are things that weren't even on the table at the time. And so how can we look back at a deal that was made, as I said, years and years ago, and suggest that they should be broken up today? [00:05:43] Well, look, there's no expiration date when it comes to the illegality of a transaction. I think there is a way in which the entire social networking ecosystem looks different today, because Facebook was permitted to go out and make these acquisitions. [00:06:01] I don't know about that argument. I mean, it seems like the marketplace took care of it. Now, with you on this and it's just not it's not the same as it was several years ago when the case was filed. Can this case survive and give us more about why you think Facebook meta [00:06:19] doesn't need to be broken up? So first, let me clarify. There are real monopolies in America, and monopolies are an enormous problem because they prevent a free market. They fight against capitalism, right? So if you're on the right, you should be against monopolies [00:06:35] even more than the left is. That's what Adam Smith warned about. Also, Lina Khan has done a terrific had done a terrific job overall in fighting monopolies. And I and I support her. Now, having said that, I've said for now, years and years, I think that [00:06:52] focusing on these social media companies is totally the wrong direction. The drug companies have massive monopolies and I could list many others, right? But in the case of social media, there is real competition. So I honestly, I don't know what they're talking about with meta being a monopoly. [00:07:07] So YouTube is bigger than Facebook is. And Instagram TikTok is eating Instagram's lunch. So how are they a monopoly? Like, can they bully TikTok and YouTube and Snapchat and all the other, and X and blue Sky and all these companies out of the market? [00:07:26] No they can't. Believe me. They're trying and they can. The the so-called evidence was not at all convincing to me. They wanted to neutralize an opponent. Yeah. That's what happens in business. You compete in the marketplace and you there's a lot of different ways [00:07:42] to neutralize an opponent. You mention how Instagram is growing so fast, and that's why they were thinking of buying it. Yeah. You think about buying growing companies and then even that terminology. They wanted to buy or bury. That's what you do. [00:07:58] That's what companies do. They try to beat the competition. They try to get more customers. And so and if they can't beat them, sometimes they buy them. Now you can collect enough of them where you would turn into a real monopoly if Facebook bought, you know, YouTube or Google or Apple. [00:08:14] And then they started collecting. Well, then we could have a massive problem. But you get rid of Facebook, you're still going to have the rest, right? Or meta or break them up. And so Google bought YouTube years ago. That was a really smart purchase. That turned out to be a great purchase for YouTube. [00:08:30] Are we going to say you were bad for making a great purchase? Now we're going to take YouTube away from you. I just don't see the logic of this at all because in a monopoly, they dominate the market so much that you don't consumers don't have a real choice. [00:08:45] But I'm not forced to go on Facebook or Instagram or WhatsApp and you're not either. And by the way, I should state in all of these cases that I have a I have a bias here because I run Young Turks and Young Turks is on Facebook and Instagram etc. So I'm just being honest about that. [00:09:02] But I but you see my genuine opinion on why I think what I do on this, I just don't see this case at all. Sharon. Last word. Yeah, I don't know. I tend to agree with you that, but I, I also think that when the case was filed, perhaps, you know, they must have thought they could make a legal argument for it. [00:09:20] The only thing that you said that that perhaps I could find a way to argue with is the part about nobody forces you to go on these. It seems logical. It seems honest. But what about the kids and all the, you know, testimony that we saw on Capitol Hill and the studies that have been done that [00:09:38] they control so much of the messaging. And maybe that's, you know, another issue. But it's it's important, though, to, to regulate them and figure out if someone or one of them perhaps has too much of the marketplace, [00:09:53] too much Influence and I'm kind of mixing issues, but that's that's the only place I could land. But I tend to agree with you. Yeah. And I hear you on that. And by the way, I don't want people to misinterpret what I'm saying. You should always have regulation. The question is how much and what kind of regulation. [00:10:10] So if you say to whether it's Meta or Google or now Google's Alphabet or TikTok, oh, have at it, Hoss. Do anything you like. Take everybody's private information, do whatever you want with the private information. No no no no no. We need regulations and we need equal regulations. [00:10:25] Not hey, TikTok has too many pro-Palestinian videos, so we're going to do a new and weird and unprecedented regulation on them. No. Same regulation for all the companies. Let's be fair to everyone. And look, I, I, I want to go after a lot more monopolies, but I just [00:10:43] don't think this is the right target. So you guys decide based on the information we gave you. Every time you ring the bell below, an angel gets its wings. Totally not true, but it does keep you updated on our live shows.