In a significant antitrust trial that could reshape the landscape of social media, Meta CEO Mark Zuckerberg faced tough questioning from an attorney representing the Federal Trade Commission (FTC). The trial, which centers on allegations that Meta unlawfully monopolized the social media market, entered its second day as Zuckerberg mounted his defense regarding the company’s acquisitions of Instagram and WhatsApp.

Key Testimony and FTC Allegations

Daniel Matheson, the lead attorney for the FTC, argued that Zuckerberg’s decision to acquire Instagram was primarily motivated by a desire to neutralize a potential competitor. Reference was made to Zuckerberg’s previous emails in which he described Instagram as a “rapidly growing, threatening network.”

Responding to the accusations, Zuckerberg acknowledged the existence of the emails but emphasized that they were part of early discussions about the potential acquisition and did not fully encapsulate his enthusiasm about Instagram’s potential for growth. “I think that mischaracterizes what the email was,” he stated during his testimony.

The Strategy Behind Acquisitions

On the witness stand, Zuckerberg reiterated the strategic rationale behind acquiring Instagram, indicating that such purchases were aimed at accelerating product development and enhancing user experience. He noted that discussions surrounding Instagram also included assessments of competition from other platforms asserting their own social networking capabilities.

Matheson also mentioned a 2012 message from Zuckerberg to Facebook’s former CFO that highlighted concerns regarding Instagram and Path, noting their potential to disrupt Facebook’s business model. Zuckerberg defended his analysis, claiming that these concerns were part of a broader exploration of ways to evolve Facebook’s offerings.

Historical Context of Acquisitions

Meta, previously known as Facebook, acquired Instagram for $1 billion in 2012 and later purchased WhatsApp for $22 billion in 2014. These acquisitions marked a shift in Meta’s strategy from smaller “acqui-hires”—where companies were purchased primarily for their talent—toward maintaining acquired platforms as independent services. This shift allowed Meta to expand its presence in mobile and engage younger demographics amid emerging competitors like Snapchat and TikTok.

FTC’s Market Definition and Meta’s Response

The FTC’s lawsuit, initiated in 2020 during Donald Trump’s presidency, claims that Meta’s acquisitions were aimed at eliminating competition, thereby forming an illegal monopoly in social media. However, Meta contends that the FTC’s narrow definition of its competitive landscape ignores significant rival platforms, such as TikTok, YouTube, and Apple’s messaging services. In a statement, Meta expressed that the FTC’s actions seem contradictory to the approval of its acquisitions more than a decade ago.

Trial Proceedings and Implications

The trial is presided over by U.S. District Judge James Boasberg, who previously dismissed Meta’s motion for summary judgment, deciding that the case merits a full trial. The outcome of the trial could determine whether Meta will be required to divest Instagram and WhatsApp, potentially altering the current dynamics of social media competition.