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Zuckerberg Warns of TikTok Threat in FTC Antitrust Trial
In a pivotal antitrust trial in Washington, Meta CEO Mark Zuckerberg testified that the China-based video-sharing app TikTok poses a “highly urgent” competitive challenge to his company. During his testimony, Zuckerberg defended Meta, parent company of Facebook and Instagram, against the Federal Trade Commission’s (FTC) effort to dismantle the tech giant, arguing that they face significant competition in the social media landscape.
Competition from TikTok and Other Platforms
Zuckerberg, appearing for his third day of testimony, aimed to reinforce Meta’s position that it encounters intense rivalry for users’ attention from platforms such as TikTok, Google’s YouTube, and others within the digital space.
According to reports, Zuckerberg stated, “We observed that our growth slowed down dramatically [as TikTok gained traction in 2018],” responding to inquiries from Meta’s chief counsel, Mark Hansen.
He further emphasized the severity of the situation, adding, “It was highly urgent. This has been a leading priority for the company for several years.”
FTC’s “Buy or Bury” Allegations
The FTC contends that Zuckerberg employed a strategy of acquiring nascent competitors like Instagram and WhatsApp to preemptively eliminate potential threats to Meta’s alleged monopoly. The agency argues that Meta dominates the market for social networking platforms centered on personal connections, identifying Snapchat as its primary, albeit limited, competitor.
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Meta’s Evolving Platform Strategy
Zuckerberg countered the FTC’s definition of the social media market, asserting that Meta’s applications, including Facebook and Instagram, have transitioned to function more as “discovery engines” rather than solely relying on a friends-and-family networking model. He highlighted TikTok, YouTube, and Apple’s iMessage as direct competitors in the current landscape.
“People will be sharing in new ways in five years than what is happening today,” Zuckerberg predicted, indicating a shifting paradigm in social communication.
Instagram Acquisition Defended
Addressing the acquisition of Instagram, Zuckerberg refuted the government’s claim that the purchase was intended to suppress a rival. He maintained that the acquisition facilitated, rather than hindered, Instagram’s expansion and development.
Past Communications Under Scrutiny
Earlier in the week, FTC lawyers subjected Zuckerberg to rigorous questioning, utilizing his prior emails and messages to present evidence of Meta’s alleged anti-competitive conduct.
Federal prosecutors presented a 2018 internal document where Zuckerberg privately acknowledged the potential antitrust implications of Meta’s ownership of Instagram.
Internal Concerns over Antitrust Scrutiny
Referring to the document, Zuckerberg reportedly considered, “I wonder if we should consider the extreme step of spinning Instagram out as a separate company.”
He further noted, “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,” indicating an awareness of potential regulatory challenges.
In a 2012 email exchange with former CFO David Ebersman, Zuckerberg conceded that acquiring Instagram would effectively “neutralize a competitor,” further fueling the FTC’s case.
During his court testimony, Zuckerberg also admitted that a key motivation for acquiring Instagram was its superior in-app camera technology compared to Facebook’s existing features.
Acquisition Offer for Snapchat
The FTC also disclosed that Zuckerberg had previously offered $3 billion to acquire Snapchat, an offer rejected by CEO Evan Spiegel.
Sandberg Testimony to Follow
Zuckerberg’s testimony concluded Wednesday afternoon, with Sheryl Sandberg, Meta’s former Chief Operating Officer, scheduled to testify subsequently.
Failed Settlement Attempts
Prior to the trial, Meta reportedly engaged in extensive lobbying efforts with the Trump administration to secure a settlement that would prevent Zuckerberg from having to appear in court.
Reports indicate that Zuckerberg contacted FTC Chairman Andrew Ferguson in late March, proposing a mere $450 million to resolve the agency’s claims—a small fraction of the $30 billion settlement sought by Ferguson.
Zuckerberg then increased his offer to nearly $1 billion. However, Ferguson reportedly insisted on a minimum of $18 billion, along with a consent decree restricting Meta from monopolistic practices.
Ultimately, pre-trial settlement negotiations were unsuccessful, although a resolution remains theoretically possible at any point during the ongoing trial. Ferguson and other FTC officials have asserted their commitment to pursuing the case to its conclusion.