An attorney for the Federal Trade Commission told a judge that Facebook, fearing the competitive threat of Instagram posted to their social media network, acquired both as a way to “neutralize” the rival.
“They decided that competition was too hard,” the FTC’s attorney, Daniel Matheson, said in his opening statement in the government’s antitrust case against the Meta Platforms social media empire.
He argued that with Meta’s monopoly in social media, “consumers do not have reasonable alternatives they can turn to,” even as satisfaction has declined.
At stake is the potential breakup of Facebook-parent Meta, as the government has zeroed in on the 2012 acquisition of Instagram and 2014 purchase of WhatsApp.
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The Federal Trade Commission sued Meta in 2020, during Donald Trump‘s first term, claiming that the social media giant had sought to maintain its dominance at a time when mobile and cloud computing posed a new threat to Facebook’s business.
In his opener, Matheson said that in 2010, Facebook was faced with “a dramatic sea change of competitive conditions,” given the shift to mobile services. The company, he said, struggled to create its own mobile photo app. The government’s attorney, though, said that the threat was greater, as they “knew that Instagram was building a parallel network.”
Matheson pointed to an often-cited 2012 email that Meta CEO Mark Zuckerberg sent, in which he wrote that they needed to “neutralize a potential competitor.” “What we’re really buying is time,” Zuckerberg wrote in the email.
The government’s lawyer referred to the email as a “smoking gun,” but said that the FTC had a trove of additional evidence to prove its case. He said that after the Instagram purchase, Facebook shelved a new application, Facebook Camera, that would have rivaled the photo app.
The government is expected to call Zuckerberg as a witness later today, in what is likely to be a highlight of the trial. Up until recently, Zuckerberg had been a frequent target of Trump’s attacks. Trump last year even called for him to be jailed if the Meta platforms influenced the outcome of the 2024 election.. More recently, though, Zuckerberg has tried to make nice with Trump, with Meta donating to his inaugural fund, overhauling its D.C. lobbying shop and ending fact-checking. Zuckerberg has reportedly sought to settle the case.
Meta has argued that it faces an expanding amount of competition, including from X and TikTok, while pointing out that its acquisitions of Instagram and WhatsApp were approved by federal regulators.