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Mark Zuckerberg defended Meta in a landmark US antitrust trial, denying claims it bought Instagram and WhatsApp to crush competition. The FTC argues Meta holds a monopoly in social networking.
Meta CEO Mark Zuckerberg (Photo: Reuters)
Mark Zuckerberg on Monday took the stand in a landmark US antitrust trial, over enforcers’ claims that Meta spent billions of dollars to acquire Instagram and WhatsApp to fend off Facebook competitors.
Federal Trade Commission (FTC) attorneys argued that Facebook, since renamed Meta, devoured what it saw as competitive threats.
The FTC also sought to force Meta to restructure or sell Instagram and WhatsApp, testing President Donald Trump’s promises to take on Big Tech while posing an existential threat to a company that by some estimates earns about half of its US advertising revenue from Instagram.
During the trial, Zuckerberg was shown an internal Facebook email from 2011 that warned Instagram was a hit on smartphones and could easily copy what his social network offered.
Another 2012 email regarding acquiring Instagram suggested simply keeping the app running without any improvements while Facebook developed its own products, and in doing so avoid upsetting users by shutting it down.
Zuckerberg downplayed those exchanges as early talk before plans for Instagram came together.
The Meta Platforms CEO also emphasised that friends and family sharing was only one priority for the app along with discovering other content.
In fact, a 2018 decision to prioritise Facebook content shared by users’ friends over video posts and other public content failed to grasp a shift toward users sharing that content via messages instead of posting life updates in their feeds, Zuckerberg said.
“I think we misunderstood how social engagement online was evolving,” Zuckerberg said.
“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” he said.
He estimated that now around 20 per cent of content on Facebook and 10 per cent on Instagram is generated by users’ friends as opposed to accounts they follow based on interests.
Meta attorney Mark Hansen countered in his first salvo that “acquisitions to improve and grow an acquired firm” are not unlawful in the United States and that is what Facebook did.
THE FTC ARGUMENTS
The FTC argues that Meta’s $19 billion WhatsApp acquisition in 2014 followed the same pattern, with Zuckerberg fearing the messaging app could either transform into a social network or be purchased by a competitor.
Meta’s defense attorneys counter that substantial investments transformed these acquisitions into the blockbusters they are today.
They also highlight that Meta’s apps are free for users and face fierce competition.
The FTC argues that Meta’s monopoly power is demonstrated by a severely downgraded user experience — with too many ads and product changes.
The US government argues that Facebook and Instagram are dominant players in apps that provide a way to connect with family and friends, a category that does not include TikTok and YouTube.
However, Meta disagrees.
COMPETITION WITH TIKTOK
Meta has argued that its purchases of Instagram in 2012 and WhatsApp in 2014 have benefited users, and that Zuckerberg’s past statements are no longer relevant amid competition from ByteDance’s TikTok, Google’s YouTube and Apple’s messaging app.
How users spend time on social media and which services they consider interchangeable will be core to the case. Meta will argue that an increase in traffic to Instagram and Facebook during TikTok’s brief shutdown in the United States in January shows direct competition.
The FTC claims that Meta holds a monopoly on platforms used to share content with friends and family, where its main competitors in the United States are Snap’s Snapchat and MeWe, a tiny privacy-focused social media app launched in 2016.
Platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube and Reddit, are not interchangeable, the FTC has argued.
THE CASE AGAINST META
The case against Meta was originally filed in December 2020, during the first Trump administration, and all eyes were on whether he would ask the FTC to stand down.
Zuckerberg, the world’s third-richest person, has made repeated visits to the White House as he tried to persuade the US leader to choose settlement instead of fighting the trial.
As part of his lobbying efforts, Zuckerberg contributed to Trump’s inauguration fund and overhauled content moderation policies.
He also purchased a $23 million mansion in Washington in what was seen as a bid to spend more time close to the center of political power.
Zuckerberg’s former lieutenant Sheryl Sandberg and a long line of executives from rival companies are scheduled to testify at a trial expected to last at least eight weeks.
Central to the case is Facebook’s 2012 billion-dollar purchase of Instagram — then a small but promising photo-sharing app that now boasts two billion active users.
