On Tuesday, Meta CEO Mark Zuckerberg was the first to take the stand. He made those arguments in an ongoing antitrust trial over his company’s acquisitions of Instagram and WhatsApp. The U.S. Federal Trade Commission (FTC) recently filed suit to dismantle Meta. They further contend that through acquisition of leading platforms the company has unlawfully maintained a monopoly.
U.S. District Judge James Boasberg is overseeing the trial. Most importantly, it will start the long overdue process of showing whether Meta’s acquisitions have indeed stifled competition and harmed social media users. The agency argues that the company abused its dominant position to squash up-and-coming competitors. Zuckerberg instead boldly claimed that the social media industry is so hyper competitive right now, that it’s a real challenge. He named specific positive competitors TikTok, X (Twitter), and YouTube.
Here’s what Zuckerberg’s testimony revealed about Meta’s strategic decision-making on acquisitions. He detailed that Instagram was largely for its state-of-the-art camera technology. The current social network was not a major factor in their choice. This statement came in light of an email he wrote to Facebook’s former Chief Operating Officer, Sheryl Sandberg, in which he expressed urgency regarding Instagram’s rapid growth:
“Instagram is growing so much faster than us that we had to buy them for $1 billion.” – Mark Zuckerberg
Meta bought Instagram in 2012 and then WhatsApp two years later. At the time, the company was simultaneously working on its own competitor too, Facebook Camera.
When pressed by FTC lawyers about whether Meta could have built a competing app instead of acquiring Instagram, Zuckerberg acknowledged the challenge of developing new applications:
“I’m sure we could have built an app,” – Mark Zuckerberg
He added, “Many more times than not, when we’ve tried to build a new app, it hasn’t gotten a lot of traction.” This assertion is a powerful reminder against the dangers big, entrenched tech companies have when they try to innovate for a more competitive marketplace.
Research firm eMarketer projects that Instagram will account for more than half of Meta’s advertising revenue in the United States by 2025, illustrating the app’s significance to the company’s financial future.
As the trial moves forward, many other high-profile witnesses are set to take the stand, including Facebook’s former COO Sandberg and Instagram co-founder Kevin Systrom. The proceedings are expected to continue for weeks as each side presents its evidence and arguments.