“Your honor, the FTC calls Mark Zuckerberg.”
Flanked by two bodyguards, Meta’s CEO solemnly strode right into a Washington, DC courtroom. Regardless of his last-ditch efforts to keep away from a trial, he was there, jaw clenched, to defend his firm from being damaged up by the US authorities.
Shortly after he was sworn in, the Federal Commerce Fee’s lead legal professional for the case, Daniel Matheson, requested Zuckerberg to mirror again on when Fb was the underdog.
“In hindsight, you’re glad you didn’t promote to MySpace?” Matheson requested.
“Sure,” Zuckerberg responded.
Over the subsequent a number of hours of questioning, Matheson walked Zuckerberg down reminiscence lane to the interval simply earlier than Fb’s $1 billion acquisition of Instagram in 2012, which the FTC claims was the primary in a collection of anti-competitive steps that locked out different firms. In a lawsuit that was initially filed 5 years in the past and went to trial this week, the company argues that Meta needs to be pressured to spin off each Instagram and WhatsApp, which it later acquired for roughly $19 billion in 2014.
Whereas on the stand, Zuckerberg appeared to slowly chill out as he recounted main moments from Fb’s early historical past, from the launch of the Information Feed to the corporate’s rocky transition to cellphones in 2012. Appreciable time was spent asking him about Fb’s founding mission to attach family and friends, and the way early rivals like Path and Google Plus challenged that use case. When requested to substantiate that he has been Meta’s “sole choice maker” and controlling shareholder since 2006, he shortly nodded his head twice and mentioned, “Sure.”
Whereas Matheson’s line of questioning at instances felt monotonous, it appeared a minimum of partly meant to offer historic context for Chief Decide James Boasberg, who admitted throughout pre-trial that he’d by no means used a Meta service. (At one level, Boasberg requested the Meta CEO for a crash course on what “native code” meant. Zuckerberg eagerly obliged.)
Later within the day, the FTC began to hone in on the Instagram acquisition. Matheson confirmed inside emails during which Zuckerberg warned colleagues that Instagram’s early rise was “actually scary” for Fb. In different emails, he complained concerning the sluggish tempo of growth of Fb’s personal images app, Fb Digital camera, and described members of the crew as “checked out.”
“We actually have to get our act collectively shortly on this since Instagram’s rising so quick,” Zuckerberg wrote in one other inside e mail proven to the courtroom. In a separate trade with an engineering govt engaged on Fb Digital camera, Zuckerberg tried to instill a way of urgency: “If Instagram continues to kick ass on cell or if Google buys them, then over the subsequent few years they may simply add items of their service that duplicate what we’re doing now.”
In courtroom, Zuckerberg downplayed the menace Instagram posed to Fb on the time. “Yeah, in fact,” he mentioned in response to Matheson asking if each apps have been competing to attach pals with one another. “Was that the primary factor that was occurring? To not my recollection.”
The FTC’s case hinges on the argument that Meta has a monopoly within the US on “private social networking companies,” a market the company says solely consists of Snapchat and MeWe, a self-described “privacy-first social media community” that claims to have “over 20 million customers worldwide.” By together with these two companies, the FTC claims that Meta owns practically 80 % of energetic customers available in the market.
Throughout Meta’s opening arguments, the corporate’s lead lawyer Mark Hansen argued that the FTC’s market definition is artificially slender by excluding TikTok, iMessage, and different companies. He referred to as the case “a seize bag of FTC theories at conflict with the information and at conflict with the regulation.”
A standard technique in antitrust instances is for a corporation to decrease its affect to look much less monopolistic. In Meta’s view, the marketplace for person consideration is far broader than the FTC’s definition. Hansen introduced inside Meta knowledge exhibiting how Fb and Instagram utilization soared when TikTok was briefly offline within the US earlier this 12 months. And when Fb had a worldwide outage in 2021, he introduced knowledge exhibiting that YouTube’s utilization elevated way over Snapchat’s.
Even when it may show that Meta has monopoly energy in a related market, the FTC will even have to point out over the approaching weeks that the corporate illegally acted to realize or preserve its dominant place.
To listen to Meta retell it, the corporate noticed alternatives the place it might make investments and develop fledgling merchandise into now-massive apps used around the globe. However the FTC argues that, like Zuckerberg’s early refusal to promote to MySpace, Instagram and WhatsApp would have been simply nice on their very own.
On the finish of the day, because the FTC’s Matheson was nonetheless quizzing Zuckerberg about his intent behind shopping for Instagram, Decide Boasberg requested to finish the testimony. As Zuckerberg stepped down from the witness stand, one in every of his safety guards motioned for them to go away the room earlier than everybody else began submitting out — one other try for the CEO to get forward of the fray.
