For the last five weeks, an agency of the Federal government has attempted to convince a judge that Meta should be forcibly broken up for parts.

FTC v. Meta is nearing closing statements and could be decided in the weeks to come.

Social media influencers, small businesses advertisers, and roaming bands of phone scrollers have their online experiences on trial. That’s millions, if not billions of users not just in the United States but around the globe.

The social media turned virtual reality conglomerate founded in a Harvard dorm room as Facebook in 2004 has remained competitive and profitable despite all the booms and busts of the Internet age. But now it’s in the rare position of having its past business activities scrutinized by a court and a government agency hellbent on trustbusting.

For the millions of users of Meta’s products, that could mean a big change for the apps on their phones.

The Federal Trade Commission’s case hinges on two separation acquisitions from 2012 and 2014, Instagram and WhatsApp, which the FTC deems were “illegal” purchases that fueled the company into an ever-powerful monopoly.

Were it not for Meta buying up Instagram and WhatsApp, the government claims, consumers would be better off and would have more choices for “personal social networking,” a market definition the government has used to build its case.

This is despite the majority opinion during the time of Facebook’s acquisitions, which mostly lampooned them as exorbitant wastes of capital that had market analysts shaking their heads.

Now, after a decade of investment, growth, and popularity, Instagram is competing for eyeballs along with social platforms like TikTok, LinkedIn, Roblox, YouTube shorts, and Snapchat. Users are swapping their phone numbers over WhatsApp while other encrypted messaging apps and protocols like Signal, iMessage, and even RCS for Android gain steam.

What’s the government’s case?

The trial has elicited plenty of juicy tidbits from Meta’s executive memos, email chains, and internal conversations that were unearthed in the case discovery files.

They demonstrated that Meta (then Facebook) executives were worried about competitors gaining users or adopting newer technologies, including Google’s YouTube, Snapchat, and several video apps. The rise of TikTok stormed the social media market at an unprecedented scale.

During its arguments, the FTC painted a picture of a company panicked by new tech upstarts. Meta’s executives emailed each other frantically, shifting their internal strategy and deploying capital to acquire companies or rapidly deploy new technology to meet the moment.

Sometimes, that meant acquisitions. Other times, that meant launching new features that users were demanding and providing a vision for how their version would succeed. At all times, it was about a company surviving in the dog-eat-dog world of American capitalism.

Why it fails

If that were illegal or questionable behavior, it would be a scandal. But it’s not and the government knows it. This is how any successful company should act if they want to live to see another day. It’s not a federal crime.

Apps like Instagram and WhatsApp are popular and widespread today because of Meta’s investments, engineering, coding, and the ability to make money so that users can freely access them, not despite them. The vast resources put to use under Meta’s umbrella have springboard these applications to reach billions of users, and at no cost to the consumer. But these apps aren’t alone.

Popular websites and apps like X/Twitter, YouTube, and TikTok are direct competitors to each of Meta’s platforms, and users enjoy cross-posting and using each app for a different purpose. It’s one of the most beautiful parts of an open Internet.

But reading from the Federal Trade Commission’s opening statement demonstrates why this case is less about a specific company’s market actions and more about a fringe antitrust theory that consumer welfare should take a back seat to arcane market definitions.

It’s a shell game, as we’ve written elsewhere.

The truth is that “personal social networking” is not a distinct category that matters to consumers and it shouldn’t matter in competition law. Different generations and users have different needs and desires when it comes to their online social media networks. This is especially true if the market is based on apps that are completely free to use, which makes this FTC case unlike most other antitrust cases based on consumer prices and consumer welfare.

The future of markets on the line

If the court rules with the FTC and undoes two previous acquisitions that were proven successful and beneficial for consumers, what’s to stop the government from rewriting history in all other spheres of economic activity?

More than anything, the government’s shell game in seeking to extirp two separate business transactions from a social media company that has made them successful and profitable is the ultimate test for American innovation and our rule of law.

Will our insanely fast and competitive world of digital services be extinguished by government bureaucrats and lawyers who can’t be depended on to understand what they’re regulating?

If antitrust dogma forces our judicial system to put mergers and acquisitions on ice due to sloppily defined market definitions and considerations after the fact, what benefit will this be to consumers?

Social media is nascent, competitive, user-specific, and increasingly personalized. Meta’s desire to meet consumers where they are is a reminder of this. Conversations, photos, videos, and podcasts are distributed on all kinds of different channels that match a user’s unique preference, and new providers are emerging each and every day.

If our US regulatory authorities distort the law enough, they will have what they deem as success. But it will come at a cost to future innovation, prosperity, and consumer choice.

What will be the ultimate cost to consumers who like and are drawn to these services and apps and who believe they benefit from them?

A “successful” legal regime that penalizes trade and innovation won’t be the incumbent economy for next-generation technologies for AI, quantum computing, and any other technology yet to be invented. One only need look at China to see what the alternative promises.

Rather than litigate the past and risk undoing a decade of innovation and growth, though, our authorities should concentrate on making consumers’ lives better today. Concentrate on real consumer welfare in antitrust law and empower our entrepreneurs and consumers to provide and receive value to improve our lives.

Otherwise, we’re in for a painful lesson about how innovation and law will intersect in the 21st Century.

Yaël Ossowski is deputy director of the Consumer Choice Center.