Source: Cointelegraph Original: "{title}"
As the parent company of Facebook, Instagram, WhatsApp, and Messenger, Meta is facing antitrust lawsuits that could limit its ability to develop artificial intelligence (AI) amid competition from rivals.
The U.S. Federal Trade Commission (FTC) first filed a lawsuit in 2021, accusing Meta of violating antitrust laws through acquisition rather than competition strategies. If the court rules against Meta, it may be forced to split its various instant messaging services and social media platforms into independent companies.
Losing these social media companies would not only harm Facebook's competitiveness in the social media industry but also affect its ability to use data from these platforms to train and develop its proprietary Llama AI models.
The trial could last anywhere from several months to a year, but its outcome will have a profound impact on Meta's position in the AI competition.
The FTC initially filed a lawsuit against Meta, then still operating under the Facebook name, in 2020. A year later, the agency amended its complaint, stating that Meta (then Facebook) had adopted illegal "acquire or bury" strategies against more innovative competitors after "failing to develop innovative mobile features" for its network. This led to a monopoly in the "friends and family" social media market.
Meta founder and CEO Mark Zuckerberg had the opportunity to respond to these allegations during the first day of the FTC trial against Meta on April 14. He testified that only 20% of user content on Facebook comes from users' friends, while that figure is about 10% on Instagram. Zuckerberg claimed that the nature of social media has changed.
"People continue to engage with an increasing amount of content that is less related to friends' activities," he stated—indicating that Meta's social media business has diversified sufficiently.
When the FTC initially filed the lawsuit, Meta called the allegations "revisionist history" and reiterated this claim on April 13, stating that the agency "ignores reality." The company argued that acquiring Instagram and WhatsApp benefited users and that the emergence of YouTube and TikTok also demonstrated competition in the market.
If the D.C. Circuit Court rules against Meta, the global social media giant will be forced to split these services into independent companies. Jasmine Enberg, vice president and chief analyst at market research firm eMarketer, stated in an interview with the Los Angeles Times that such a ruling could cause Meta to lose its competitive edge in the social media market.
"Instagram is indeed its biggest growth driver, as it has long compensated for Facebook's shortcomings, especially among younger users," Enberg said. "Facebook is no longer the cool place for college students to gather."
Such a ruling would also affect the pool of data Meta can use to train AI models. In July 2024, Meta suspended the launch of AI models in the European Union (EU) due to "regulatory uncertainty."
This suspension occurred after the privacy advocacy organization None of Your Business filed complaints in 11 European countries, opposing Meta's use of publicly available data from its platforms to train AI models. Subsequently, the Irish Data Protection Commission ordered a halt to this practice until a review was completed.
On April 14, Meta was allowed to use publicly available data—namely posts and comments from adult users across all its platforms—to train models. If these companies are split into independent entities, each with its own organizational structure and data protection policies and practices, Meta will be cut off from accessing vast amounts of data and human communication information that could be used to improve AI.
Andrew Rossow, a cyber law attorney at Minc Law and CEO of AR Media Consulting, told Cointelegraph that in this scenario, "each company will likely control its own user data, and unless data-sharing agreements are renegotiated, Meta will be restricted from using this data, with new agreements subject to regulatory scrutiny and user/consumer privacy laws."
However, Rossow noted that this is not a total loss for Meta. Zuckerberg's company will still retain a significant amount of data from Facebook and Messenger. It can continue to use "opt-in" data from consumers who allow their posts to be used for AI training, as well as synthetic datasets and third-party and open data.
With DeepSeek entering the competition and Meta launching the fourth version of its open-source Llama model, the competition to challenge OpenAI and its ChatGPT model in the AI field has intensified over the past year.
In addition to training new models, major AI development companies are investing billions of dollars to build new data centers to accommodate the demands of new iterations. In January 2025, Meta announced plans to build a 2-gigawatt data center equipped with over 1.3 million Nvidia AI graphics processing units.
Zuckerberg posted on Threads, "This will be a pivotal year for AI development. By 2025, I expect Meta AI to become the leading assistant serving over a billion people […] To achieve this goal, Meta is building a data center larger than 2 gigawatts, big enough to cover a significant portion of Manhattan."
His announcement followed the $500 billion Stargate project, which will be led by OpenAI and SoftBank for large-scale AI development investments, with Microsoft and Oracle as equity partners.
In this competition, AI companies are seeking broader and more diverse data sources to train their AI models—and have engaged in some questionable practices to obtain the necessary data. To maintain competitiveness with OpenAI while developing the Llama 3 model, Meta sourced thousands of pirated books from the LibGen website. Court documents related to Meta's pending case indicate that Llama developers used pirated book data because obtaining licenses from sources like Scribd was "too expensive."
Time is another reason for using pirated works. One engineer wrote about the lengthy delivery time for purchasing book licenses through formal channels: "They take over 4 weeks to deliver the data."
This practice is not limited to Meta. OpenAI has also been accused of mining data from pirated works hosted on LibGen.
Rossow suggested, "To ensure lasting impact—beyond short-term profits, Meta would be best to prioritize investment in advanced data collection, rigorous auditing, and the implementation of privacy protection and encryption technologies."
By focusing on transparency and responsible practices, "Meta can continue to genuinely advance AI capabilities, rebuild and cultivate long-term user trust, and adapt to evolving legal and ethical standards, regardless of how its platform portfolio changes."
Tech companies are currently facing lawsuits from various fronts, including allegations of privacy violations, copyright law infringements, and anti-competitive practices. Major cases against large companies like Google, Amazon, and Meta have yet to yield results, which will determine whether and how these companies can continue their existing operations while also setting a regulatory framework for AI development.
Rossow stated that the current antitrust case against Meta may determine how courts interpret antitrust laws applicable to tech companies, involving tech mergers, data usage, and market competition. It will also indicate whether courts are "willing to break up tech conglomerates" when it comes to suppressing competition, while "going further based on existing precedents to align with cyberspace law."
Related: Meta receives EU regulatory approval to use social media content to train AI
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