Politics Archive

In a video deposition Judge Boasberg watched a few weeks ago and the media is now being shown, former Morgan Stanley investment banker Ali Esfahani describes the whirlwind few days in which the $19 billion deal came together. The deal followed none of the usual steps Morgan Stanley would typically take contacting buyers and negotiating price on the company’s behalf, he says. Instead, after being called on a Saturday night, he showed up to a meeting to hammer out the deal, but “when we arrived, we realized the price had already been negotiated, the buyer had already been selected.” Esfahani says he felt like he was basically “being thrown a bone because of all the preemptive work that we had done.”

After six weeks, the FTC’s anti-monopoly trial against Meta is finally over. The parties will need to file post-trial briefs, including Meta’s argument to strike FTC expert Hemphill’s testimony, and then it will be up to Judge Boasberg to write his opinion. Boasberg says he plans to “take a welcome respite from thinking about this” until the first brief is due. He thanks everyone for their “hard work over the last four and a half years” — a stark reminder of how long this case has been in the works — and adds that the “issues are certainly interesting, and I’ll await final submissions and get you my decision as expeditiously as I can.”

The company plans to move to strike Hemphill’s testimony, saying he prejudged Meta’s antitrust liability even before he was retained as an expert witness by the FTC. Huff pulls up a more full version of the 2019 presentation that Hemphill and former Biden official Tim Wu gave to the agency urging an investigation into Meta’s potential monopoly power, just a week before it opened its probe. Huff suggests that the agency ultimately took Hemphill’s litigation strategy advice, though the expert disagrees that’s what he offered. Huff shows a slide suggesting the FTC interview many of the witnesses that appeared in this case, including the founders of Instagram and WhatsApp. Hemphill says “it’s hardly brain surgery to talk to all the founders.” Huff also pulls up a post Hemphill and Wu wrote after the FTC filed its case, calling Meta a monopolist.

the committee organizing Donald Trump’s 250th anniversary celebration of the signing of the Declaration of Independence.

When lower engagement correlates with users being served more ads, Meta suggests that might actually mean that users like the ads so much that they’re clicking them and spending their time on the advertiser’s site — not that they dislike ads so much that they leave. Hemphill concedes that he didn’t parse out how much of the decreased engagement was due to people liking or disliking ads, but says the distinction doesn’t seem important.

On cross examination, Meta attorney Kevin Huff pushes back on Hemphill’s argument that temporary changes in user behavior around an outage should not get much weight, in part because businesses don’t make decisions based on such a blip. He shows an excerpt of Instagram chief Adam Mosseri’s testimony, where he said Meta observed an increase in time spent on its platforms during a 2013 YouTube outage, and as a result invested in building out video products like Facebook Live, at one point investing a billion dollars a year on content.

During Code and Country at the Bitcoin Conference, Sen. Cynthia Lummis (R-WY) mentioned that as soon as stablecoin bills are passed through Congress and signed into law, the Republicans were ready to gun on creating the Reserve. “It’s gonna be a heavier lift than I thought,” she added, because after watching her colleagues debate the GENIUS Act, it was clear that many of them “don’t understand” crypto.

The FTC has argued that Meta paid a premium for WhatsApp beyond its market value, which it was willing to do squelch a potential competitor. But Boasberg asks Hemphill to reconcile how that could be the case for Instagram as well, whose $1 billion price tag now looks quite low given its explosive growth and money-making ability. Hemphill says the price needs to be analyzed within the context of 2012. But the judge still wonders, “why can’t you think about it that Mark Zuckerberg is really smart,” and saw value where others didn’t?

Hemphill argues that Meta has reduced overall market output for consumers with its acquisitions of Instagram and WhatsApp, because consumers believe it’s reduced the quality of the services even if they’ve added users. But “users is a real concrete metric,” where quality is harder to quantify, Boasberg says, “so why shouldn’t we be focused on that?” Hemphill concedes it’s harder to measure, but says quality is an important aspect of the overall health of the market.

Meta has argued that sharing content with friends and family has become a much smaller portion of its business, as it competes aggressively with TikTok through its Reels video product, and that’s what the judge should focus on. But Hemphill says the fact that Meta has added products to its apps doesn’t mean its earlier products no longer matter. If a monopolist has power in one market, he says, that can give it a “leg up” in adding a new product, “even if it’s not as good as the competitors’.”

Boasberg wonders how big of a difference he’d need to see in how many ads Meta serves to certain groups of users versus others in order to determine it matters in assessing its monopoly power. As a hypothetical, he asks if offering a product for a cent higher to some users would be enough to constitute price discrimination. Basically, he asks, “in quantifying the amount of discrimination that Meta is imposing, is that something that you can do such that it is meaningful?” He’s also asked, “how compelling does the evidence have to be regarding ad load?” Hemphill says there’s no magic number, but Meta’s own documents show that executives thought it would be meaningful to reduce the number of ads younger users see to increase engagement.

Carlton’s approach to measuring where users go when Facebook and Instagram aren’t available paints a disingenuous picture of how the social media market works, Hemphill argues. This is in part because MeWe — which offers the very personal social networking services the FTC says Meta has monopolized — would be very far down the list of places users diverted their time to during the outages.

Meta’s expert Professor Carlton argued last week that the court should consider which apps users turn to when Facebook and Instagram aren’t available, like during its 2021 outage. In that case and in his own experiment, users turned to TikTok and YouTube more than Snapchat, even though that’s the app included in the FTC’s market definition. Hemphill says this is a flawed argument against Meta’s monopoly power because it shows users diverted their time to apps that even its own experts would likely agree don’t “plausibly belong in the market,” like Google Chrome and Candy Crush. “This is an illustration of the problems that result when you pursue this kind of gotcha approach,” he says.