META ON TRIAL: COULD INSTAGRAM BE UP FOR GRABS?
A trial is underway which could see Meta sell its image-based social giant Instagram sold under orders from the FTC in Washington. The Federal Trade Commission has argued that Meta has created a monopoly, eliminating competition through the purchase of Instagram, Facebook and WhatsApp.
With the trial still ongoing with no clear indication as to what the outcome may be, We are putting on our tinfoil hats and discussing the possible outcomes of the trial and what the results could mean for both users and marketers.
Can Instagram Run Separately?
If Meta loses the trial you shouldn’t expect to see a large ‘For Sale’ sign propped up against the window of Instagram’s silicon valley HQ any time soon. Instead, a ‘remedy period’ (also known as ‘punishment’) will put the thumbscrews on Meta and force them to make changes which makes the market more diverse, competitive and ultimately more profitable. For Meta, this opens the doors to a number of possible actions, including:
- Selling off Instagram
- Submitting to a long and costly oversight period by a governing body
- Pay a significant fine
- Significantly alter its platform’s policies to separate Meta’s entities.
A large fine is not something new for Meta. They’ve seen fines from £100 million to £1 billion… Who else remembers the Cambridge Analytica scandal? But even with a financial penalty, Meta’s problems might only just be getting started.
Meta is Forced to Divest
We are cautious to speculate too heavily on what might happen if Meta divests Instagram or WhatsApp, though it may be on the cards if the FTC wins its case. If the court finds that Meta illegally dissolved competition through purchasing businesses, it can order them to dissolve its (alleged) monopoly.
Due to its integration with Facebook, Instagram is probably safe from divestiture which will be music to the ears of our expert team of paid ads specialists. However that might mean danger for WhatApp – which Meta purchased just over ten years ago for a cool $19 billion – which would be firmly in the firing line.
Meta Wins?
Time might have been Meta’s secret weapon throughout this trial. The FTC officially launched its lawsuit back in 2020 which coincides with TikTok’s rise to power and since then, diversification at the top of the social media landscape has only broadened, potentially undermining the FTC’s entire case.
Apps such as Snapchat have seen a resurgence in popularity alongside the likes of Pinterest, Discord and WhatsApp’s opposite number: Telegram. This gives Meta some room for manoeuvring as they can comfortably argue that they are not operating a monopoly if other companies such as TikTok routinely pull in more than 1.5 billion monthly active users.
Data Sharing For Marketers
For marketing agencies all over the world, this trial may significantly impact their digital strategies. It is likely that part of the remedy for this trial may be to silo user information by platform.
Currently, user information is shared between Instagram, Facebook and WhatsApp, allowing marketing agencies to conduct precise cross-platform ad targeting. By cutting tracking between platforms, Meta campaigns will suffer from a data drought which could potentially result in:
- An initially lower ROAS
- Additional time will need to be spent creating siloed campaigns
- Difficulty retargeting users across platforms
With the trial still underway, we’re keeping our fingers crossed that whatever the outcome, the ripples from its conclusion will have a minimal impact on both day-to-day users and the businesses who rely on Meta to market themselves.
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