The Meta CEO was presented with a binder full of internal communications at the company, which revealed concerns about Meta’s future.
Meta’s CEO Mark Zuckerberg took the witness stand on Monday (14 April) to defend his company against a massive antitrust lawsuit brought on by the US Federal Trade Commission (FTC).
The lawsuit, which was filed in 2020, accuses Meta of holding a monopoly in the social networking space by acquiring Instagram and WhatsApp, “wilfully” maintaining market dominance. The social media giant tried getting the lawsuit dismissed, however, late last year, it was ruled that Meta would have to face the FTC in court.
At the US District Court for Colombia earlier this week, the FTC argued that Meta’s acquisitions were part of a “buy or bury” strategy, which absorbs competition while denying consumers other options for social media platforms.
The Commission said that Meta illegally cemented a social media monopoly by acquiring its competitors while they were small start-ups.
Meta, then Facebook, bought Instagram in 2012 for $1bn, when the photo sharing app had 13 employees. Two years later, it purchased the messaging app WhatsApp in a $19bn deal.
At the trial, the FTC presented Zuckerberg with a binder full of internal communications at Meta. In one email, the Meta CEO commented on the possibility of spinning out Instagram.
“As calls to break up the Big Tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years anyway,” he wrote in the email.
In another 2018 email, Zuckerberg wrote that had Instagram remained independent, “it would likely be around the size of Twitter or Snapchat with 300-400m MAP [monthly active people] today, rather than closer to 1bn.”
Lawyers for the social media giant countered that Meta faces plenty of competition from other social media platforms such as TikTok, YouTube and LinkedIn. They also argued that the FTC had approved Meta’s – then Facebook – acquisition of the two businesses more than a decade ago. Trying to unwind the mergers would set a dangerous precedent, they said.
“This case is a grab bag of FTC theories at war with fact and at war with the law,” Meta’s head litigator Mark Hansen said. “Meta has no monopoly.”
Meta tried to purchase the 2011-founded Snapchat in 2013 in a $3bn deal. The purchase, however, did not go through.
During the hearing yesterday (15 April), Zuckerberg said he thought that Snapchat “wasn’t growing at the potential that it could” and believed he could make it better.
“For what it’s worth, I think if we would had bought them we would have accelerated their growth, but that’s just speculation,” he testified.
In response, a spokesperson for Snap, the company behind Snapchat, told Business Insider: “Anticompetitive behaviour can often slow and thwart growth for smaller companies and start-ups, especially when dominant companies like Meta use their size and position to stifle competition.
“Public reports of Meta’s attempt to buy Snap and then egregiously copy its features, was an attempt to do just that.”
Snapchat popularised the face filters and the Stories features ubiquitous on several social media platforms today. Instagram adopted the Stories feature in 2016 and copied Snapchat’s live selfie filters in 2017.
This lawsuit could result in Meta having to divest Instagram and WhatsApp, creating massive implications, not just for the future of the social media giant, but for the billions who use the apps daily. The trial is expected to go on for eight weeks.
Don’t miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic’s digest of need-to-know sci-tech news.
