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“Your honor, the FTC calls Mark Zuckerberg.”
Escorted by two security personnel, the Meta CEO entered a Washington, D.C. courtroom. After unsuccessful attempts to avert litigation, Mark Zuckerberg appeared to contest the U.S. government’s efforts to dismantle his corporation.
FTC Attorney Questions Zuckerberg on Facebook’s Past
Following the oath, Daniel Matheson, lead counsel for the Federal Trade Commission, began questioning Zuckerberg by prompting him to recall Facebook’s early days as an underdog in the social media landscape.
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“Looking back, are you satisfied with your decision not to sell to MySpace?” Matheson inquired.
“Yes,” Zuckerberg affirmed.
Focus on Instagram and WhatsApp Acquisitions
The subsequent hours of examination saw Matheson guiding Zuckerberg through Facebook’s history leading up to its $1 billion purchase of Instagram in 2012. The FTC contends this acquisition initiated a pattern of anti-competitive actions aimed at neutralizing rival businesses. In the ongoing antitrust lawsuit, initiated five years prior, the agency is advocating for the forced divestiture of Instagram and WhatsApp, the latter acquired by Meta for approximately $19 billion in 2014.
Zuckerberg Recounts Facebook’s Evolution
During his testimony, Zuckerberg appeared more at ease while recounting pivotal moments in Facebook’s development, including the introduction of the News Feed and the company’s challenging shift to mobile platforms in 2012. The questioning dwelled extensively on Facebook’s original objective of connecting individuals and families, addressing competitive pressures from platforms like Path and Google Plus. When asked to verify his position as Meta’s “sole decision maker” and majority shareholder since 2006, Zuckerberg promptly confirmed with a nod and a “Yes.”
Judge’s Tech Understanding Questioned
Matheson’s sometimes repetitive questioning appeared partly aimed at establishing a historical framework for Chief Judge James Boasberg. Judge Boasberg had previously admitted unfamiliarity with Meta’s services. Notably, Judge Boasberg requested clarification from Zuckerberg on the meaning of “native code,” to which the Meta CEO readily responded with an explanation.
Internal Emails Highlight Instagram’s Threat
Later in the proceedings, FTC attorneys concentrated on the acquisition of Instagram. Matheson presented internal communications where Zuckerberg cautioned associates about Instagram’s rapid ascent, deeming it “really scary” for Facebook. Further emails revealed his dissatisfaction with the sluggish progress of Facebook’s photo application, Facebook Camera, describing team members as disengaged.
“We really need to accelerate our efforts on this as Instagram’s growth is exceedingly fast,” Zuckerberg stated in another email presented as evidence. In a separate communication with an engineering leader working on Facebook Camera, Zuckerberg emphasized urgency: “If Instagram maintains its dominance in mobile, or if Google acquires them, they could easily integrate features into their service that replicate our current offerings.”
Zuckerberg Minimizes Instagram Competition
During his courtroom testimony, Zuckerberg diminished the competitive threat Instagram presented to Facebook at that juncture. In response to Matheson’s query about whether both applications competed in connecting users, Zuckerberg conceded, “Yeah, of course.” However, he added, “Was that the primary focus? Not as I recall.”
FTC Alleges Meta Monopoly in Social Networking
The FTC’s antitrust case asserts that Meta holds a monopoly in the U.S. market for “personal social networking services.” The agency defines this market narrowly, including only Snapchat and MeWe – the latter describing itself as a “privacy-first social media network” with over 20 million global users. By this market definition, the FTC contends that Meta commands approximately 80 percent of active users.
Meta Disputes Market Definition, Argues Broader Competition
In Meta’s opening statement, lead attorney Mark Hansen challenged the FTC’s market definition as excessively restrictive. He argued it improperly excludes platforms like TikTok and iMessage. Hansen characterized the FTC’s case as “a collection of theories detached from both facts and legal precedent.”
A standard tactic in antitrust defense involves minimizing perceived market dominance. Meta maintains that the relevant market for user attention extends beyond the FTC’s narrow scope. Hansen presented internal Meta analytics illustrating surges in Facebook and Instagram engagement during a temporary TikTok outage in the U.S. earlier in the year. He also cited data showing YouTube experienced a greater usage increase than Snapchat during a global Facebook outage in 2021.
Meta Defends Acquisitions as Growth Opportunities
Even if the FTC establishes Meta’s monopoly power within a specific market, it must further demonstrate in the coming weeks that the company engaged in unlawful practices to attain or preserve its market leadership.
Meta argues that it proactively identified opportunities to invest in and develop nascent platforms into globally utilized applications. However, the FTC counters that, similar to Zuckerberg’s earlier decision against selling to MySpace, both Instagram and WhatsApp were poised for independent success.
Testimony Concludes, Zuckerberg Exits Courtroom
As the day concluded, and as FTC attorney Matheson continued to probe Zuckerberg regarding his motivations for acquiring Instagram, Judge Boasberg concluded the day’s proceedings. Upon leaving the witness stand, Zuckerberg was promptly escorted out of the courtroom by his security detail, preceding the general departure – a further instance of the CEO seeking to avoid public interaction.