Meta Platforms CEO Mark Zuckerberg testified on Monday in Washington, D.C. of the United States., defending his company’s multi-billion-dollar acquisitions of Instagram and WhatsApp.
This testimony is part of an ongoing high-stakes trial where U.S. antitrust enforcers claim that Meta’s purchases of these platforms were aimed at neutralizing competition.
The Federal Trade Commission (FTC) is seeking to force Meta to restructure or sell these companies, arguing that Meta’s dominance has harmed competition in the social media space.
Defense against monopoly claims
In court, Zuckerberg countered allegations that Meta’s purchases of Instagram in 2012 and WhatsApp in 2014 were motivated by the desire to eliminate competition.
- According to Zuckerberg, the integration of these platforms did not harm users or stifle competition.
- He noted that friends and family sharing was only one priority for the app, along with discovering other content.
Zuckerberg acknowledged that a decision made by Meta in 2018 to prioritize Facebook content shared by users’ friends over video posts and other public content failed to grasp a shift toward users’ sharing of content. At that time, users were moving away from posting updates on their feeds and instead began sharing content more privately through messages.
“I think we misunderstood how social engagement online was evolving
“People just kept on engaging with more and more stuff that wasn’t what their friends were doing,” Zuckerberg said.
- Zuckerberg further explained that, while around 20% of content on Facebook and 10% on Instagram now comes from users’ friends, this shift reflects broader changes in social media consumption habits.
Meta’s Competition with TikTok
Meta’s defense centers on the argument that its acquisitions of Instagram and WhatsApp were made to adapt to the evolving landscape of social media competition.
The FTC has pointed to Zuckerberg’s emails suggesting that the acquisition of Instagram was a strategic move to neutralize a potential competitor to Facebook. WhatsApp was similarly viewed as a growing threat that could eventually evolve into a social network of its own.
- However, Meta has refuted these claims, arguing that the market dynamics have shifted since these acquisitions, particularly with the rise of new competitors like TikTok.
- The FTC also pointed to the competition posed by platforms such as TikTok, Google’s YouTube, and Apple’s messaging app, which they argue represent direct competitors to Meta’s services.
Meta counters that traffic to Instagram and Facebook surged during TikTok’s brief shutdown in January 2023, demonstrating direct competition between the platforms.
The FTC’s Monopoly Claims
The FTC claims that Meta holds a monopoly over platforms where users share content with friends and family, with Snapchat and MeWe cited as the main competitors in this space.
- However, platforms like TikTok, YouTube, and Reddit, which allow users to broadcast content to strangers based on shared interests, are not seen as interchangeable alternatives by the FTC.
- U.S. District Judge James Boasberg has pointed out that the FTC faces significant challenges in proving its case, raising doubts about whether its claims will hold up in court.
The trial is expected to continue into July, and if the FTC wins, it would still need to prove that forcing Meta to sell Instagram or WhatsApp would restore competition to the market.
What you should know
If the FTC’s lawsuit is successful and Meta is forced to divest from Instagram or WhatsApp, the financial impact could be substantial. Instagram plays a critical role in Meta’s advertising business, while WhatsApp holds the company’s largest daily user base and is increasingly central to its future plans around business messaging and monetization.
If the U.S. Federal Trade Commission (FTC) succeeds in its lawsuit and Meta is forced to divest from Instagram or WhatsApp, the impact on the company could be significant.
Instagram remains a core platform for Meta’s global advertising revenue, while WhatsApp holds the company’s largest daily user base and is increasingly central to its future plans around business messaging and monetization.
This trial is part of a broader effort to hold Big Tech companies accountable for alleged anti-competitive behavior, a movement that gained momentum in President Donald Trump’s administration.
Meta has made efforts to align with Trump, including rolling back certain content moderation policies and contributing to his inauguration fund. However, despite these efforts, antitrust lawsuits against Meta, Amazon, Apple, and Google remain a significant challenge for the tech industry.
