Mark Zuckerberg’s private email regarding Facebook’s purchase of Instagram over a decade ago has returned to haunt the meta at this week’s historic antitrust trial. And the outcome of the case could ultimately depend on whether the judge would purchase an attempt to explain them, experts told the Post.
The Federal Trade Commission presented a series of explosive private messages, including a 2012 exchange that Zuckerberg said that buying Instagram would “neutralise competitors.”
In another 2018 message, Tech Tycoon considered whether Meta should preempt regulators to “consider extreme steps to spin out Instagram.”
“As the appeal for big tech companies grows, there is a small chance that they will be forced to spin out Instagram and WhatsApp in five to ten years anyway,” Zuckerberg said in a 2018 document.
The FTC, who wants to force Meta to sell Instagram and WhatsApp, claims that Zuckerberg’s email is evidence of the use of a “purchase or burial” strategy that crushes up apps before poses a legal threat to the social media empire. Zuckerberg was the first witness to be called to the stands on Monday, facing the grill for three consecutive days.
Zuckerberg’s private email “represents the strongest part of the government case,” according to Rebecca Ho Allensworth, an antitrust expert and professor at Vanderbilt Law School.
“I think this is a dark cloud that follows the meta. It could take several years, at least throughout this whole process,” added Allensworth.
The candid message offers an unusual glimpse behind the infamous button-covered Zuckerberg mask. And antitrust experts have long thought that they are some of the worst evidence of meta’s anti-competitive tactics. Back in 2019, the post reported that the FTC has acquired a “magnificent document” on the weight of whether or not it will try to acquire Meta.
Aside from Zuckerberg’s questioning, the email was highly featured during the FTC’s opening discussions, while accusing Meta of having an illegal monopoly. Judge James Boasberg of the Eastern District of Virginia will determine the outcome of the non-judgment trial.
The company bought WhatsApp for $1 billion in Instagram in 2012 and about $19 billion in 2014.
The FTC showed an email from 2011. Zuckerberg told Underling that Facebook “kicked the ass” via Instagram. Then in 2012, Zuckerberg worried that “Lnstagram could hurt us meaningfully,” and that it was “pretty threatening to us.”
“Messenger hasn’t beaten WhatsApp. Instagram was growing much faster than us, so we had to buy it for $1 billion,” Zuckerberg said in November 2012 in another email to then-Facebook COO Sheryl Sandberg.
In an email in 2013, Zuckerberg complained that he was “disappointed and annoyed” by Snap co-creator Evan Spiegal’s rejection of the $6 billion acquisition offer.
Other emails have shown that Zuckerberg is pondering the WhatsApp acquisition because of the risk that rival messaging apps like China-based WeChat are “building social networks and trying to replace us.” Other Facebook executives were personally concerned that Google would beat Facebook to punch and buy WhatsApp first.
Meanwhile, Zuckerberg denied that the email had shown anti-competitive intentions and instead was a sign of his constant delusion that his competitors would defeat Facebook. At one point, he described Tiktok as a “very urgent” threat to Meta due to its popularity in 2019.
“What is that Andy Grove quote? ‘Only delusions survive,'” Zuckerberg said in a reference to the former Intel CEO. “It’s my job to understand what’s adjacent to us and what’s going on in the industry.”
Zuckerberg said that, referring to his email about possible 2018 preemptive Instagram spinoff, he “need to consider the direction politics appears to be going at the time” as his company put pressure on Capitol Hill.
On Instagram itself, Zuckerberg argued that his acquisition helped, rather than undermining growth, that it could have never happened without Facebook’s support.
The FTC argues that Meta is dominant over the narrow market for social media companies, where Snapchat is a direct competitor, as its direct competitor. According to the agency, other apps like video-centric Tiktok are in separate categories.
Zuckerberg and Meta’s lawyers argue that Meta is facing fierce competition from Imessage for the attention of users on Tiktok, YouTube and Apple. In the stand, Zuckerberg said that over time the meta has become increasingly focused on the origins of its friends and family.
A Meta spokesman said the FTC case “ignoring reality.”
“More than a decade after FTC reviewed and cleared the acquisition, the Commission’s lawsuit in this case sends a message that the transaction is not truly final,” the spokesperson said in a statement. “It’s ridiculous that the FTC is trying to disband the great American company while the administration is trying to save China’s owned Tiktok.”
This case may turn on whether the definition of meta’s market is determined by a judge to be more accurate.
“The market definition and monopoly issues are huge and we cannot win unless the government can succeed there,” added Allensworth. “On that front, Zuckerberg portrayed his company as a very focused focus on portraying competition, innovation and start-up disruption.”
Despite his denial, Zuckerberg took steps to avoid trial altogether – including making at least three trips to the White House, trying to persuade President Trump to resolve the case.
Earlier this week, the Wall Street Journal reported that Zuckerberg had provided just $450 million to resolve the case.
“The FTC lawyers have done a great job of exposing the monopoly strategy Meta has had over the years,” said a former FTC official who recently left the agency and called for anonymity to discuss the case. “These emails demonstrate the clear intent to buy genuine internal concerns with potential competitors with the legal implications of these anti-competitive decisions.”
Antitrust advocates say Zuckerberg’s testimony and the email itself, apart from playing a key role in the FTC case, will have a wide range of implications as Meta faces ongoing scrutiny from Congress and federal regulators.
“These emails are evidence of smoking guns that Mark Zuckerberg intentionally sucked in by smoking a threat before his competitors were intimidated. Meta deserves a book to break the law.”
“This trial was already a shame for Meta, and it should not be surprising why Zuckerberg was trying to persuade Trump to cancel the whole thing,” added Howarth.
