One challenge the F.T.C. will face is explaining why it decided not to block Facebook’s acquisitions of Instagram in 2012 and WhatsApp in 2014. Those deals, which took place during the Obama administration, were vetted with market analysis at the time for how they might affect competition. The acquisitions ultimately proceeded.
“It should be assumed that Facebook will seek to obtain all the internal work product that lay behind the original decisions that the acquisitions did not pose a competitive problem,” said George Hay, a law professor at Cornell University and a former antitrust official at the Justice Department.
Ms. Newstead signaled that the previous regulatory reviews of the WhatsApp and Instagram deals would be key to Facebook’s defense, calling the acquisitions “settled law” and blasting the regulators for wanting a “do over.”
Mr. Zuckerberg also indicated in his memo to employees that the government’s definition of competition was too narrow. In its complaint, the F.T.C. said Facebook dominated social networking, with more than 3 billion people globally using one of its apps every month. In their complaint, the state attorneys general said Facebook’s behavior was born out of a fear of losing that position of dominance.
But Mr. Zuckerberg said Facebook was fighting a far larger ecosystem of competitors that went beyond social networking, including “Google, Twitter, Snapchat, iMessage, TikTok, YouTube and more consumer apps, to many others in advertising.” That is because Facebook and its other apps are used for communication and entertainment, such as streaming video and gaming. Against that broader universe, the company said, competition was healthy.
Even if the F.T.C. and states prove their cases against Facebook, there remains a question of whether the company can even disentangle WhatsApp and Instagram from its core social networking business.
While Mr. Zuckerberg for years operated WhatsApp, Instagram and Messenger independently, he announced he would unite their underlying infrastructures last year so that they would work together better. That way, someone could send a private message from their Instagram account to a friend using Facebook Messenger, and the two services would communicate seamlessly.