The Federal Trade Commission's (FTC) antitrust case against Meta, which seeks to break up the company's acquisitions of Instagram and WhatsApp, has been criticized for its flawed approach. The FTC's definition of the market, which excludes private messaging apps, has been deemed "ridiculous" by some, and its failure to address Meta's true power source – network effects – has raised concerns about the case's effectiveness.

The FTC's case relies on a narrow market definition, which it calls "personal social networking services." This category includes apps that primarily facilitate sharing between friends and family, but excludes private messaging apps. This definition has been questioned, as it conveniently gives Meta a de facto legal monopoly status in the US with 80-percent market share. The FTC's lead attorney, Daniel Matheson, did not ask Mark Zuckerberg about MeWe, an obscure blockchain-based social network, during the roughly 13 hours he was on the witness stand, further highlighting the flaws in the market definition.

Moreover, the FTC's case fails to address the real source of Meta's power: network effects. The more people there are on a social network, the harder it becomes to unseat. This has been a key factor in Meta's growth, as it has leveraged network effects to expand its empire. Zuckerberg has used this strategy to grow Facebook, Instagram, and WhatsApp, and is now doing it again with Threads and Llama-powered features. The lawsuit mentions network effects as a source of power, but it is far from the focus of the case.

Breaking up Meta's acquisitions may create new short-term competitors, but it won't solve the underlying issue of network effects. To maintain competition in the long run, users would need to be able to take their profiles and friend lists with them to other services, which is a privacy and regulatory nightmare to implement. The buzz around Bluesky and ActivityPub, which Meta has hooked Threads into, suggests that people want this level of control.

The FTC's case is not without its merits, and the trial is ongoing. However, the government's approach has been criticized for missing the point. As the case continues, it remains to be seen whether the FTC will be able to prove its claims and secure a win. Meanwhile, Meta's power and influence in the tech industry remain a subject of concern.

In related news, OpenAI's ambitions continue to grow, with the release of new AI models and reports of a potential $3 billion acquisition of Windsurf, the startup behind the AI coding tool Codeium. The company's ever-expanding ambitions have led some to wonder if it wants to be the next Google, Meta, and Apple all in one.

As the tech industry continues to evolve, the importance of addressing the real sources of power and influence cannot be overstated. The FTC's case against Meta serves as a reminder of the need for a nuanced approach to antitrust regulation, one that takes into account the complex dynamics of the tech industry.