In 1998, fast-food giant McDonald's invested in a small Colorado burrito chain with just sixteen restaurants: Chipotle. Under McDonald's leadership over the next seven years — and with an investment of $340 million — Chipotle expanded from its humble Colorado beginnings to over 500 restaurants nationwide. McDonald's later sold its investment as Chipotle became a publicly traded company, where it remains a ubiquitous presence in communities nationwide.
This history illustrates that, if not for McDonald's, many of us outside of Colorado might never have eaten at a Chipotle. Even assuming Chipotle had great food before McDonald's entered the picture, for the restaurant chain to expand across the country, it required the kind of stewardship that could ensure quality, scale supply chains, handle personnel issues, and make wise investment decisions regarding real estate. Thankfully, McDonald's expertise proved invaluable in launching the chain to greater heights.
This same story can also be told for Meta’s acquisition of Instagram, which is currently receiving unjust scrutiny from the Federal Trade Commission (FTC). When Meta acquired Instagram to bolster its social media business in 2012, the photo-sharing app had roughly 50 million users, 13 employees, and wasn’t generating any revenue. After Facebook’s $1 billion acquisition, today's Instagram boasts over 2 billion monthly users, new features such as Reels, AI integration, and a host of advanced creator tools and photo editing software far exceeding the app's initial iterations. The Instagram of today would not exist without Meta, if it existed at all.
This brings us to the unfairness of Meta’s ongoing FTC trial. For all of its success in building Instagram into the platform it is today, the FTC is now pushing, among other "remedies," for Meta to divest from Instagram and WhatsApp. Translation: they are seeking to steal the business directly from the team that built it.
If this doesn’t strike one as immoral enough, consider the arguments the FTC is making in its attempts to do so. The FTC is claiming that Meta has a monopoly on social media, resulting from its acquisition of Instagram, due to a market definition that excludes key competitors like TikTok, YouTube, and Apple Messages. These apps include very similar features, including chat functionality and photo or video sharing, to name a few. In essence, to strengthen the plainly weak case alleging Meta has a monopoly on social media (where competition remains fierce and robust), the FTC has resorted to legal arguments that appear rather deceitful.
The FTC should abandon its attack on Meta as it faces increased foreign competition in the social media space - and remains crucial for global leadership in artificial intelligence. The FTC's lawsuit undermines the very principles of American free enterprise. Far from being able to prove "consumer harm," as is traditionally the impetus for antitrust enforcement, Instagram happens to be free. We should be thanking McDonald's and Meta for building their brands and products into what they are today, not punishing them.
