Meta’s big win Tuesday is a victory not only for the company, but also for anyone who believes antitrust law should be grounded in realities, not ideology.
A federal judge struck down the Federal Trade Commission’s high-profile antitrust case against Meta, the parent company of Facebook and Instagram, on Tuesday. U.S. District Judge James Boasberg’s message was clear: the FTC failed to demonstrate that Meta holds monopoly power.
The digital landscape has evolved too much since the case was first filed five years ago. As the ruling put it, quoting Heraclitus, “no man can ever step into the same river twice.” In the world of information technology, the river is constantly moving.
The FTC originally filed suit in 2020, arguing that Meta’s past acquisitions of Instagram and WhatsApp were anticompetitive. But those deals had already been reviewed and cleared by regulators. The judge threw out the case, saying that the FTC had failed to convince him that it could prove monopoly power.
But the Biden administration revived it in 2021 with a repackaged theory, narrowing the definition of the “market” to one so contrived that it effectively included only Meta. This was a strategy designed to manufacture monopoly status out of whole cloth. The judge accepted the case, but the strategy ultimately failed.
Beyond the loss of this case, the FTC’s approach reveals a deeper problem: a poor understanding of how dynamic economies actually work. Modern antitrust enforcement is too often stuck in an old playbook, where regulators assume markets are static and that once a company has beaten rivals, it has power over customers that is enduring. That’s not how today’s tech economy functions.
In a dynamic economy, market position is always contested. New ideas, tools, and business models constantly emerge. Firms rise and fall faster than regulators can file lawsuits. In this environment, three features define how innovation works.
First is the ability to generate new ideas—identifying technological opportunities that solve real problems. Meta doesn’t have a monopoly on this. In fact, critics of the company often argue the opposite: that it had to buy innovation from others. If true, that suggests Meta was vulnerable, not dominant. The founders of Instagram, for instance, had the creative spark. But they lacked the capacity to scale their product. Meta provided that.
Second is access to the tools of innovation—technologies, talent, and legal frameworks. No single company controls these. Every firm has its own data, its own knowledge, and its own blind spots. Meta’s past success in social networking doesn’t guarantee it will lead in AI, or virtual reality, or whatever comes next. In fact, large firms can easily become complacent. The market punishes them when they do.
Third is the selection process—the mechanisms that determine which innovations thrive. Success depends not just on invention, but on assembling the right mix of engineering talent, business expertise, customer support, and market timing. Most new ventures fail because they lack the capacity to execute. Acquisitions help solve this problem. Instagram succeeded because Meta helped it scale. That’s not anticompetitive—it’s how innovation reaches customers.
If the FTC had understood these dynamics, it would have seen that Meta was far from immune to competition. TikTok exploded in popularity. YouTube adapted with Shorts. Messaging platforms like Discord and Signal gained ground. The marketplace kept evolving—regardless of what regulators imagined.
What’s most troubling is how much time and taxpayer money was wasted. The FTC spent five years pursuing a theory that ignored economic realities and distracted a major American company in the middle of an intensely competitive global race in AI. That was avoidable.
Rather than contorting legal definitions to punish companies that once succeeded, antitrust officials should focus on whether businesses or governments are damming Heraclitus’s river. That means looking forward, not backward, and deeply into how the economy works, not into what-ifs about long ago acquisitions.
A dynamic economy doesn’t need regulators who act like directors. It needs regulators who understand evolution. The Meta case failed because the FTC clung to a static vision in a world of constant change. If we want to preserve American innovation, that thinking must change too.
