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How Meta’s antitrust case could dampen AI development

Meta, the parent company of Facebook, Instagram, WhatsApp and Messenger, is facing antitrust proceedings that could limit its ability to develop AI amid a field of competitors.

First filed in 2021, the Federal Trade Commission (FTC) alleges that Meta’s strategy of absorbing firms — rather than competing with them — violates antitrust laws. If the court rules against Meta, it could be forced to spin out its various messenger services and social media sites into independent companies.

The loss of its stable of social media companies could harm Facebook’s competitiveness not only in the social media industry but also in its ability to train and develop its proprietary Llama AI models with data from those sites.

The trial could take anywhere from a couple of months to a year, but the outcome will have lasting consequences on Meta’s standing in the AI race.

Meta’s antitrust case and its effect on AI

The FTC first opened its complaint against Meta in 2020 when the firm was still operating as Facebook. The agency’s amended complaint a year later alleges that Meta (then Facebook) used an illegal “buy-or-bury” scheme on more creative competitors after its “failed attempts to develop innovative mobile features for its network.” This resulted in a monopoly of the “friends and family” social media market.

Meta founder and CEO Mark Zuckerberg had the chance to address these allegations on April 14, the first day of the official FTC v. Meta trial. He testified that only 20% of user content on Facebook and some 10% on Instagram was generated by users’ friends. The nature of social media has changed, Zuckerberg claimed.

“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” he said — meaning that the nature of Meta’s social media holdings was sufficiently diverse.

How Meta’s antitrust case could dampen AI development
The FTC alleges that Meta identified potential threat competitors and bought them up. Source: FTC

At the time of the FTC’s initial complaint, Meta called the allegations “revisionist history,” a claim it repeated on April 13 when it stated the agency was “ignoring reality.” The company has argued that the purchases of Instagram and WhatsApp have benefited users and that competition has appeared in the form of YouTube and TikTok. 

If the District of Columbia Circuit Court rules against Meta, the global social media giant will be forced to unwind these services into independent firms. Jasmine Enberg, vice president and principal analyst at eMarketer, told the Los Angeles Times that such a ruling could cost Meta its competitive edge in the social media market.

“Instagram really is its biggest growth driver, in the sense that it has been picking up the slack for Facebook for a long time, especially on the user front when it comes to young people,” said Enberg. “Facebook hasn’t been where the cool college kids hang out for a long time.”

Such a ruling would also affect the pool of data from which Meta can draw to train its AI models. In July 2024, Meta halted the rollout of AI models in the European Union, citing “regulatory uncertainty.” 

The pause came after privacy advocacy group None of Your Business filed complaints in 11 European countries against Meta’s use of public data from its platforms to train its AI models. The Irish Data Protection Commission subsequently ordered a pause on the practice until it could conduct a review. 

Related: Meta’s Llama 4 puts US back in lead to ‘win the AI race’ — David Sacks

On April 14, Meta got the go-ahead to use public data — i.e., posts and comments from adult users across all of its platforms — to train the model. If these firms dissolved into separate companies, with their own organizational structures and data protection policies and practices, Meta would be cut off from an ocean of data and human communication with which its AI could be improved. 

Andrew Rossow, a cyberspace attorney with Minc Law and CEO of AR Media Consulting, told Cointelegraph that in such an event, “companies would most likely control their own user data, and Meta would be restricted from using it unless new data-sharing agreements were negotiated, which would be subject to regulatory scrutiny and user/consumer privacy laws.”

However, Rossow noted that it wouldn’t be a total loss for Meta. Zuckerberg’s firm would retain the wealth of data from Facebook and Messenger. It could continue to use “opt-in” data from consumers who allow their posts to be used for AI training, and it could also employ synthetic data sets as well as third-party and open data.

Meta, the AI race and data protections

The race to unseat OpenAI and its ChatGPT model from AI dominance has grown more competitive in the last year as DeepSeek joined the fray and Meta launched the fourth iteration of its open-source Llama model. 

In addition to training new models, major AI development firms are investing billions in new data centers to accommodate new iterations. In January 2025, Meta announced the construction of a 2-gigawatt data center with more than 1.3 million Nvidia AI graphics processing units. 

Zuckerberg wrote in a post on Threads, “This will be a defining year for AI. In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people […] To power this, Meta is building a 2GW+ datacenter that is so large it would cover a significant part of Manhattan.”

How Meta’s antitrust case could dampen AI development
Illustration of the data map coverage. Source: Mark Zuckerberg

His announcement followed the $500-billion Stargate project, which would see massive investment in AI development led by OpenAI and SoftBank, with Microsoft and Oracle as equity partners. 

Related: Trump announces $500B AI infrastructure venture ‘Stargate’

Amid this competition, AI firms are looking for broader and more varied sources of data to train their AI models — and have turned to dubious practices in order to get the data they need. In order to stay competitive with OpenAI when developing its Llama 3 model, Meta harvested thousands of pirated books from the site LibGen. According to court documents in a case pending against Meta, Llama developers harvested data from pirated books because licensing them from sources like Scribd seemed “unreasonably expensive.” 

Time was another perceived motivator for using pirated works. “They take like 4+ weeks to deliver data,” one engineer wrote about services through which they could purchase book licenses.

The practice is not limited to Meta. OpenAI has also been accused of mining data from pirated work hosted on LibGen. 

Rossow suggested that, “to ensure lasting impact — beyond short-term profit,” Meta would do well to “prioritize investment in advanced data collection, rigorous auditing and the implementation of privacy-preserving and encryption-based technologies.”

By focusing on transparency and responsible practices, “Meta can continue to genuinely advance AI capabilities, rebuild and nurture long-term user trust, and adapt to evolving legal and ethical standards, regardless of changes to its platform portfolio.”

What a ruling for the FTC would mean

Litigation is now hitting tech firms from all sides as they face allegations of privacy violations, copyright law infringement and stifling competition. Major cases like those facing Google, Amazon and Meta that have yet to play out will decide how and whether these firms can proceed as they have, defining the guardrails for AI development as well. 

Rossow said that the current antitrust case against Meta could decide how courts interpret antitrust law for tech firms, spanning tech mergers, data usage and market competition. It would also signal that courts are “willing to break up tech conglomerates” when issues of smothering competition are involved, while at the same time, “taking current precedent a step further in harmonizing it with the laws of cyberspace.”

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Two scandals and two allies gone in two weeks – serious questions remain about Starmer’s political judgement

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Two scandals and two allies gone in two weeks - serious questions remain about Starmer's political judgement

Jeffrey Epstein and Peter Mandelson, the paedophile and the peer.

It was a friendship that endured even beyond Epstein’s convictions and one on Thursday that ended Lord Mandelson’s political career.

Politics Live: Starmer accused of ‘blatant disregard for national security considerations’

When emails emerged of exchanges between the two men showing Lord Mandelson remaining supportive of Epstein even after he was convicted for the sex trafficking of underage girls, it was clear he had to go.

Lord Mandelson tried to cling on. The PM summarily relieved him of his duties.

There had initially been an appetite to keep him, in order to avoid embarrassing Donald Trump, who himself is being asked questions about his association with Epstein – and hates it.

But when these emails emerged, it was clear to No 10 that the scandal would blow up the state visit and Mandelson had to go.

More on Peter Mandelson

But what was also true was that even attempting to keep him in these circumstances could blow up Sir Keir Starmer.

The parliamentary party – and particularly many of the women MPs – were absolutely furious that Mandelson had backed a convicted paedophile against women and girls who had, to quote one victim, been passed to men by Epstein like fruit trays.

The spectre of a powerful man like Mandelson trying to protect him and even the thought of the PM trying to row in behind was absolutely unconscionable.

As Harriet Harman said on our Electoral Dysfunction podcast before he was sacked: “These young women talked about the ruination of their lives by this man abusing his wealth and his power.

“And the idea that Peter Mandelson sided with Epstein in that situation – and this is always the question – whose side are you on?

“You’ve got to be on the side of the vulnerable and not against the person who commits criminal offences, abusing their power.”

Harman also said she thought the prime minister would have been in “anguish” over having to defend Mandelson in the Commons.

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Harriet Harman, Ruth Davidson, and Beth Rigby react to the news

He looked almost as green as the green benches on Wednesday as he insisted he had full confidence in his ambassador, despite warnings from Mandelson himself that more embarrassing material was about to emerge.

When that material did emerge, I understand that the PM spent the evening in Downing Street going through the material and then summoned his new Foreign Secretary Yvette Cooper, who has been a tireless champion in the fight to end violence against women and girls, for a meeting in which they decided to sack Mandelson.

Read more:
No 10 appointed Mandelson despite concerns
Analysis – why wasn’t Mandelson fired yesterday?

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Sky’s US Correspondent Mark Stone provides analysis on the impact this may have on UK-US relations, as the President’s state visit to the UK approaches

That the US ambassador didn’t go of his own accord has angered many MPs and probably the PM, who has a record of prosecuting child sex offenders and made halving violence against women and girls a priority for this government.

Now Mandelson has gone. But, with the end of that comes new questions.

Questions about Keir Starmer’s political judgement.

This is not the first time Lord Mandelson has resigned in disgrace.

He stepped down as trade secretary over a loan from a colleague he failed to register under Tony Blair, and then quit again as Northern Ireland secretary over a cash for passports scandal.

And now the question is, in light of the Epstein connection, why did Starmer let him back in?

There is talk around Westminster that his key advisers had backed the move and Starmer had some reservations.

As well he might, because in the end, the scandal of it all stops at the PM’s door.

There are questions as to whether No 10 ignored concerns raised by the appointment and Badenoch is asking for full transparency.

My colleague, Sam Coates, was told by two sources that the security services did flag concerns as part of the process.

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No 10 went ahead with the appointment anyway, Sky News understands

It is not known whether all of the detail was shared with the prime minister personally.

The prime minister’s official spokesman said No 10 “was not involved in the security vetting process”.

Badenoch said the latest revelations “point yet again to the terrible judgement of Keir Starmer”.

She added that it is “imperative that all documents relating to Peter Mandelson’s appointment are released immediately”.

Then there is a bigger picture.

Two weeks into a supposed reset, two scandals and two key figures gone from government.

This was a PM who promised to do politics differently and clean up after the scandal-ridden Tory years.

Peter Mandelson’s return to government and ousting in this manner casts a long shadow over the PM and that promise, and raises serious questions about the PM’s political judgement.

It also casts a shadow over the upcoming state visit.

It was only on Wednesday that No 10 was thinking about trying to keep Mandelson to try to avoid putting the spotlight back onto President Trump.

With the White House, Royal Family and the UK government all tarnished by association with sex offender Jeffrey Epstein, this was an issue they all wanted to avoid and now it is top of the agenda.

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Final two candidates confirmed in Labour’s deputy leadership race

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Final two candidates confirmed in Labour's deputy leadership race

Left-wing MP Bell Ribeiro-Addy has said she did not secure the nominations required to make it into the next round of Labour’s deputy leadership contest.

It means it is now a two-horse race between Education Secretary Bridget Phillipson and former Commons leader Lucy Powell, after the other three contenders pulled out.

Politics Live: Read Lord Peter Mandelson’s letter to US embassy staff after being sacked

In a statement on social media, Ms Ribeiro-Addy said: “Unfortunately, I have not secured the high number of nominations required to proceed in the deputy leadership contest.

“I am disappointed that the full range of Labour members’ views will not be represented on the ballot paper.”

The required nominations from fellow Labour MPs was 80, which Ms Phillipson surpassed yesterday evening with 116 votes. Ms Powell was just shy of the threshold at 77 as of 7pm Wednesday, however many MPs have declared their backing for her since so she is expected to make it through.

Bell-Ribeiro-Addy
Image:
Bell-Ribeiro-Addy

The deadline to reach 80 was 5pm Thursday, with a final tally expected to be published later this evening.

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Nominations only opened on Tuesday, leading to accusations from the left of a “stitch-up” aimed at preventing outsiders from having time to shore up a high level of support. (80 MPs is 20% of the parliamentary party).

Labour’s ruling National Executive Committee decided on the rules of the contest, which was triggered by the resignation of Angela Rayner after she admitted to underpaying stamp duty on a flat she bought in Hove.

Initially six people entered the race but housing minister Alison McGovern dropped out on Wednesday afternoon, conceding she was not going to get the support required. She had just two official nominations at the time.

Dame Emily Thornberry and Paula Barker withdrew this morning, having less than 15 nominations each as of last night’s tally.

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Length of race ‘doesn’t feel right’

Many MPs had wanted a third candidate to make it to the next round to offer an alternative to Labour members, who will decide on the winner, as Ms Powell and Ms Phillipson are seen to be similar.

Ms Powell, the MP for Manchester Central, was a member of government until last week when she was sacked in Sir Keir Starmer’s reshuffle.

One reluctant backer told Sky News that while she is “more left than Bridget” she is “hardly a socialist”.

However, another of her supporters said she gave an impressive pitch at an online hustings event on Wednesday night, when she argued that no longer being in government would work in her favour.

They told Sky News: “Her pitch is that she’s been the shop steward of the parliamentary Labour Party (PLP) in government, but now she’s not in government, she can dedicate herself to the role of deputy leader full time without a department to run. She wants to focus on defining our voter coalition and making sure we’re speaking to them.”

The same MP suggested Ms Phillipson might be too busy to take on the deputy leadership role properly, especially as she is overseeing reforms to SEND (Special Educational Needs and Disabilities) “which could be a horror show”.

However, while Ms Powell might be the preferred choice for those who want a candidate independent of the party leadership, Ms Phillipson is popular with MPs loyal to the government.

The contest is an unwelcome distraction for Sir Keir, who just last week launched his phase two “reset” following a difficult first year in office and weeks of negative headlines on immigration.

This was before the row over Ms Rayner’s tax affairs kicked off – forcing her to also quit as housing secretary and deputy prime minister and sparking a wider government reshuffle.

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Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

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Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

Zodia Custody ends Japan venture with SBI in ‘mutual decision’: Report

Standard Chartered-backed Zodia Custody has exited its Japan venture with SBI Holdings after two years, with both firms calling the move a strategic realignment.

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