Zuckerberg, Sandberg in hot seat as FTC trial seeking Meta breakup kicks off

FTC Antitrust Trial Against Meta Begins, Zuckerberg and Sandberg Face Scrutiny

Leading Meta executives, including Chief Executive Officer Mark Zuckerberg and former Chief Operating Officer Sheryl Sandberg, are under intense scrutiny as the Federal Trade Commission’s (FTC) landmark antitrust trial, which aims to potentially break up Meta, began on Monday. This significant legal challenge represents a critical juncture in Meta’s history and poses a substantial threat to its business operations. The FTC contends that Meta, under Zuckerberg’s leadership, employed a “buy or bury” strategy, allegedly overpaying for emerging companies like Instagram and WhatsApp to neutralize them as competitive threats to its social media dominance.

FTC Accuses Meta of Anti-Competitive Practices

During the government’s opening statement at the U.S. District Court in Washington, D.C., FTC attorney Daniel Matheson asserted that this unlawful tactic “established entry barriers that for over a decade safeguarded Meta’s dominance.” Judge James Boasberg is presiding over the proceedings.

“Consumers are deprived of viable alternatives,” Matheson stated.

Potential Breakup of Meta Through Spinoff of Instagram and WhatsApp

Facebook’s acquisition of Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014 are central to the case. Federal regulators are seeking to dismantle Meta by compelling it to divest Instagram and WhatsApp as independent entities, a move that could significantly impact its financial performance.

While Meta does not disclose revenue figures per application, projections from EMarketer suggest Instagram is expected to generate over $37.13 billion this year, constituting more than half of Meta’s annual U.S. advertising revenue.

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Meta Defends Acquisitions, Cites Competition from TikTok

Meta attorney Mark Hansen, in his opening statement, countered that the FTC overlooks the evolving landscape of social media, where users are increasingly sharing less personal content and primarily engaging with short-form videos, a format popularized by platforms like TikTok.

“This case is a collection of FTC theories that contradict both the facts and the law,” Hansen argued.

Zuckerberg and Sandberg Expected to Testify

Both Zuckerberg and Sandberg are expected to be called as witnesses and may testify as early as Monday. FTC attorneys indicated in a March filing that Zuckerberg could face questioning for approximately seven hours, significantly longer than any other witness.

Key Witnesses in the Antitrust Trial

Other prominent individuals expected to appear during the trial include Instagram co-founder Kevin Systrom, current Instagram head Adam Mosseri, and current Meta Chief Operating Officer Javier Olivan.

Meta’s Lobbying Efforts and FTC’s Resolve

Reports indicate Zuckerberg has been actively lobbying former President Trump to settle the FTC’s case, as part of a broader strategy to strengthen ties with his political circle.

Despite these efforts, FTC Chairman Andrew Ferguson has affirmed the agency’s readiness to pursue the case to its conclusion.

FTC spokesperson Joe Simonson stated, “The FTC is fully prepared for this trial.”

The antitrust case was initially filed in 2020.

Zuckerberg’s Emails Under Scrutiny

Zuckerberg is anticipated to face rigorous questioning focusing on emails from the time of the acquisitions. In one email from April 2012, Zuckerberg discussed the potential acquisition of Instagram.

“Instagram could significantly harm us even without becoming a massive enterprise,” Zuckerberg wrote at the time.

Meta Denies FTC Allegations

Meta has refuted the FTC’s allegations, asserting in a statement that the lawsuit “contradicts reality.”

“More than a decade after the FTC reviewed and cleared our acquisitions, the Commission’s current action suggests that no deal is ever truly final,” Meta stated.

“Regulators should be supporting American innovation, rather than attempting to dismantle a major American company and further benefit China in crucial sectors like AI,” the company added.

Challenges Ahead for FTC in Proving Breakup Case

Legal experts note the FTC faces a substantial challenge in securing a breakup. Judge Boasberg cautioned in a November ruling that the agency “faces significant questions regarding the viability of its claims in a trial setting.”

Meta Facing Multiple Regulatory Challenges

This FTC case is among several legal and regulatory hurdles confronting Meta.

EU Fine and Whistleblower Testimony Add to Meta’s Woes

The European Union is expected to impose a substantial fine on Meta in the coming days for violations of its Digital Markets Act, with estimates suggesting it could exceed $1 billion.

Separately, former Facebook executive-turned-whistleblower Sarah Wynn-Williams recently delivered critical testimony on Capitol Hill, accusing Zuckerberg and other Meta executives of compromising U.S. national security in pursuit of access to the Chinese market.