Meta boss Mark Zuckerberg conceded Tuesday that he bought Instagram because its camera technology was “better” than Facebook’s – and allegedly considered spinning off the photo-sharing app to avoid an antitrust crackdown.
The tech titan was grilled for the second straight day in US District Court in Washington, DC, during the landmark antitrust case, including about smoking-gun emails from Zuckerberg to his Facebook underlings from around the time of the 2012 acquisition of Instagram.
When pressed by FTC lawyers on whether he was concerned that Instagram’s growth posed a threat, Zuckerberg admitted it had built a better camera within its app than what Facebook had in development.
“Building a new app is hard,” Zuckerberg testified.
“We’ve probably tried building dozens of apps over the history of the company, and the majority of them don’t go anywhere.”
Zuckerberg dodged questions about whether Meta, then called Facebook, bought the app to crush a competitive threat to his social media empire.
“We were doing a build vs. buy analysis,” Zuckerberg said. “I thought that Instagram was better at that, so I thought it was better to buy them.”
But in another key moment, FTC attorneys showed the court a 2018 document in which Zuckerberg fretted about buying Instagram and whether Facebook would need to be restructured to avoid a federal crackdown during President Trump’s first term.
“I wonder if we should consider the extreme step of spinning Instagram out as a separate company,” Zuckerberg said, according to the document.
“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 added.
The FTC alleges that Meta utilized a “buy or bury” strategy to acquire key rivals Instagram and WhatsApp in order to prevent them from challenging its entrenched monopoly over social media.
It seeks to force Meta to spin off Instagram, which it acquired for $1 billion, and WhatsApp, which it bought for $19 billion in 2014.
The feds highlighted one 2012 email exchange in which Zuckerberg acknowledged to ex-CFO David Ebersman that buying Instagram would effectively “neutralize a competitor.”
“One way of looking at this is that what we are really buying is time,” Zuckerberg wrote. “Even if some new competitor springs up, buying Instagram, Path, Foursquare etc. now will give us a year or more to integrate their dynamics before anyone can get close to their scale again.”
Zuckerberg also once offered a whopping $6 billion to acquire Snapchat – but was turned down by its CEO Evan Spiegel, FTC lawyers told the court.
A separate exchange from 2012 showed a frustrated Zuckerberg putting pressure on former Facebook Chief Operating Officer Sheryl Sandberg over fears that WhatsApp was outcompeting Facebook Messenger, its own chat service.
“Messenger isn’t exactly beating WhatsApp, Instagram was growing so much faster than us that we had to buy them for $1 billion,” Zuckerberg said in the email to Sandberg. “That’s not exactly killing it.”
Sandberg is expected to appear on the stand as soon as Wednesday. Other high-profile upcoming witnesses include Instagram co-founder Kevin Systrom and current Instagram chief Adam Mosseri.
On the witness stand, Zuckerberg tried to push back on the FTC’s assertion that Facebook bought Instagram solely because of its surging user base.
“It’s not accurate to say that the only reason we were interested was the scale or growth rate,” Zuckerberg said.
“We could have built an app,” he added. “Whether it succeeded or not is a matter of speculation.”
The FTC’s case could hinge on whether it can convince Judge James Boasberg in the non-jury trial that their definition of Meta’s market is accurate.
A potential loss of Instagram is seen as particularly dangerous for Meta because the photo-sharing app accounts for more than half of its US-based ad revenue.
The FTC claims that the only direct competitors to Facebook and Instagram are Snapchat and a little known, privacy-focused app called MeWe. Other platforms like video-focused TikTok and professionally-focused LinkedIn are in distinct categories, according to the feds.
In testimony on Monday, Zuckerberg resisted FTC’s attempt to define Meta as dominant among social media firms that are built on sharing between friends and family.
“The ‘friend’ part has gone down quite a bit but it’s still something we care about,” Zuckerberg said.
The FTC also highlighted several damning emails exchanged by Zuckerberg during its opening statement, including a 2012 message where he admitted that “Instagram could hurt us meaningfully” and is “pretty threatening to us.”
In another 2008 email that has drawn scrutiny, Zuckerberg said “it is better to buy than compete.”
Meta’s lawyers fired back, asserting that the FTC was wrong to exclude the fierce competition it faces from the likes of TikTok and YouTube for user attention.
Zuckerberg had gone to great lengths to cozy up to President Trump over the past few months, seeking to avoid the FTC trial with a settlement.
Aside from donating $1 million to Trump’s inauguration fund and attending his swearing-in ceremony, Zuckerberg eliminated fact-checking and DEI programs that the president’s allies have widely criticized.
The billionaire also purchased a mansion in Washington DC and has reportedly personally visited the White House at least three times since January.
With Post wires
