Meta Fights ‘Enshittification’ Claims in FTC Monopoly Case

Trial Background and FTC Allegations

The Federal Trade Commission (FTC) brought its landmark monopoly suit against Meta Platforms Inc. in early 2025, accusing the social-media giant of leveraging its market dominance to increase ad load and degrade user experience—a phenomenon critics have dubbed “enshittification.” The FTC alleges that Meta wielded monopoly power in the personal social networking services market, foreclosed competitors, and prioritized ad revenue over product quality, ultimately harming consumers.

Meta’s Motion for Judgment: Core Arguments

In a motion filed with U.S. District Judge James Boasberg, Meta argues that the FTC has failed to present any legally sufficient evidence to prove its claims. The motion contends:

• No Monopoly Power Demonstrated: The FTC “has no proof that Meta has monopoly power” in the defined market.
• Absence of Quality Degradation Metrics: There is no credible data showing a decline in app performance, privacy, integrity, or feature sets across Facebook, Instagram, and WhatsApp.
• Undefined Ad-Load Standard: The FTC did not establish what constitutes a competitive ad-load threshold or show that users would switch services absent the alleged overloading.
• No Precedent for Quality-Based Antitrust Claim: Meta notes that no antitrust ruling has ever hinged solely on a supposed reduction in product quality.
• Acquisition Benefits Outweigh Risks: Evidence shows that Instagram and WhatsApp thrived under Meta’s stewardship, gaining billions of users and advanced monetization.

Technical Deep Dive: Ad-Load Algorithms and User Experience

Meta’s advertising ecosystem relies on real-time bidding (RTB) and machine-learning models to optimize ad placement, relevance, and frequency. Key technical points include:

• Ad Auction Latency: Meta’s distributed edge caches process billions of ad requests per second with end-to-end latencies under 100ms, minimizing third-party ad-server dependencies.
• Frequency Capping: Dynamic frequency-capping algorithms limit impressions per user per session, balancing revenue against engagement metrics such as CTR (click-through rate) and DAU (daily active users).
• Personalization Models: Deep neural networks trained on tens of petabytes of user interaction data predict relevance, ensuring that only high-value, contextually appropriate ads are shown.
• A/B Testing Framework: Continuous rollouts and multi-armed bandit experiments gauge the trade-off between increased ad density and user retention, with Meta’s internal data showing stable engagement even as impressions per user grew 12.5% year-over-year.

Market Definition and Competitive Substitution Analysis

At the heart of the FTC’s case is the definition of the “personal social networking services” market. Meta challenges the FTC’s exclusion of apps like TikTok, arguing that:

• Cross-Elasticity of Demand: Empirical studies show that daily user time on TikTok and Meta’s apps are highly substitutable, with a cross-elasticity coefficient above 0.6 in multiple J.D. Power surveys.
• Herfindahl-Hirschman Index (HHI): When TikTok, Snapchat, and emerging platforms are included, the market concentration falls well below thresholds that typically trigger antitrust intervention.
• Consumer Switching Costs: Single sign-on (SSO) innovations and data portability tools reduce friction, making rivals viable alternatives for users dissatisfied with ad experience.

Potential Remedies and System Architecture Implications

If Meta loses, the FTC has signaled a willingness to pursue structural remedies, including divestiture of Instagram and WhatsApp. Experts highlight several technical and operational challenges:

• Data Storage and Compliance: Separating data warehouses would require re-architecting Meta’s Terabyte-scale HDFS clusters and migrating user profiles without service disruption.
• Ad-Targeting Networks: Divestiture could disrupt unified ad-exchange capabilities, fragmenting real-time bidding auctions across multiple platforms and increasing latency.
• API Dependencies: Currently, Instagram and WhatsApp share Graph API integrations; a spin-off would necessitate decoupling millions of lines of interconnected code.

Expert Opinions and Recent Developments

Leading antitrust economist Dr. Fiona Scott Morton (Yale) testified that “[m]onopoly power is measured by the ability to set price or quality unilaterally.” In contrast, digital-ad engineer Marcus Lee (formerly Google Ads) emphasized that “dynamic ad loads are customer-centric—if users churn, algorithms automatically throttle back.”

In late May 2025, the House Judiciary Committee held a hearing where FTC Chair Lina Khan defended the agency’s stance, stating, “Our digital economy demands robust competition safeguards; this case is precedent-setting.” Meanwhile, Meta’s Q1 2025 earnings call revealed a 7% rise in ad revenue and stable daily active user counts, figures Meta cites to undercut claims of degraded experience.

Conclusion: What’s Next?

Judge Boasberg is expected to rule on Meta’s motion for judgment before the trial resumes, potentially deciding whether the FTC’s evidence suffices to proceed to remedy discussions. A decision favoring Meta would terminate the case and avert any threat of break-up, while a denial would extend the trial into Phase II, where potential divestitures and behavioral remedies would be hotly debated.