For the first two decades of its existence, the American tech sector flourished under a bipartisan celebration of the country’s global leadership at the cutting edge of digital innovation. Then, almost overnight in 2016, that consensus collapsed. On the left, anti-corporate skepticism drove concerns about the size of American tech companies. On the right, distrust grew out of fears that Silicon Valley’s political leanings would lead to censorship of conservative voices online.

Over the last three administrations, these pressures found an outlet in a relentless effort to use antitrust law to “break up Big Tech.” Perhaps the most ambitious of these efforts was the Federal Trade Commission’s (FTC’s) 2020 Sherman Act case against Meta, in which the agency sought to unwind its earlier approvals of Facebook’s acquisitions of Instagram in 2012 and WhatsApp in 2014. This five-year trial came to a close earlier this week, when the court announced what it had signaled repeatedly throughout the case: The Commission’s case relied on a narrow market definition that failed to consider the impact of subsequent innovations in this space.

The Commission argued that Meta maintained an unlawful monopoly in what it called the personal social networking (PSN) market, a narrow category the agency defined to include Facebook, Instagram, Snapchat, and a few smaller services but to exclude platforms such as TikTok and YouTube. Meta had allegedly dominated this market for more than a decade and preserved that dominance not through competition but by acquiring emerging threats before they could grow into full rivals. The agency focused on Meta’s purchases of Instagram in 2012 and WhatsApp in 2014, claiming these deals were designed to neutralize competitive risks and prevent the rise of rival networks. Although both acquisitions were reviewed and cleared at the time, the Commission sought to unwind them, arguing that Meta’s conduct constituted the maintenance of monopoly power and violated Section 2 of the Sherman Act.

In a sense, the Commission’s retrospective framing sought to litigate the world as it existed a decade ago, frozen in amber. But antitrust requires defining the market as it exists today. The court’s opinion documents how dramatically Facebook and Instagram have changed since the deals were approved. The shift to smartphones, the spread of cheap data plans, advances in artificial intelligence, and the explosive rise of short-form video have transformed the core experience of these platforms. Whereas a decade ago users logged in to see photos and updates from friends, today most content is in the form of short videos suggested by an algorithm and created by people the viewer has never met. This is the TikTok effect: the 2018 arrival of this new competitor disrupted the landscape, forcing every incumbent platform to respond. As a result, all three platforms now resemble one another in both format and function, and users can and do move among them.

From the standpoint of economic substitution, this means TikTok and Meta are direct competitors. Antitrust law does not test whether two services share a brand identity or a historical origin, but whether they are substitutes. The evidence at trial showed constant switching among TikTok, YouTube, Instagram, and Facebook in response to small differences in content quality or product design. It also showed that these companies respond rapidly to one another’s innovations. Meta’s shift to short video and TikTok’s addition of friend and messaging features are only the most obvious examples. The apps are converging because they compete intensely. This competition shows not only that the Commission’s market definition was unduly narrow, but also that Meta does not hold monopoly power in a way that would justify the injunction the government sought.

We’ve heard this tune before. It is similar to the remedy decision in the Google trial earlier this year. The court found that Google had violated antitrust law by paying providers to make Google the default search engine. But the court declined to require Google to divest itself of its Chrome browser as a remedy, because it recognized that the rise of generative AI was already disrupting the traditional search market.

The through line is clear. Digital markets evolve at a speed that resists tidy categories and static theories of dominance. Competitive threats rarely arrive from familiar directions, and even the largest platforms must reinvent themselves to keep pace with user preferences and new technologies. Antitrust law functions best when it acknowledges this dynamism rather than trying to freeze markets in an earlier form. By defining the market broadly and evaluating Meta’s position as it exists today, the court applied those principles with clarity and restraint. The result is a reminder that competition in technology is vigorous, unpredictable, and shaped far more by innovation than by the size of any single firm.