“Your honor, the FTC calls Mark Zuckerberg.”
Flanked by two bodyguards, Meta’s CEO solemnly strode right into a Washington, DC courtroom. Despite 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 Trade Commission’s lead legal professional for the case, Daniel Matheson, requested Zuckerberg to replicate again on when Facebook was the underdog.
“In hindsight, you’re glad you didn’t promote to MySpace?” Matheson requested.
“Yes,” Zuckerberg responded.
Over the following a number of hours of questioning, Matheson walked Zuckerberg down reminiscence lane to the interval simply earlier than Facebook’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 corporations. In a lawsuit that was initially filed 5 years in the past and went to trial this week, the company argues that Meta must be pressured to spin off each Instagram and WhatsApp, which it later acquired for roughly $19 billion in 2014.
While on the stand, Zuckerberg appeared to slowly chill out as he recounted main moments from Facebook’s early historical past, from the launch of the News Feed to the corporate’s rocky transition to cellphones in 2012. Considerable time was spent asking him about Facebook’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 verify that he has been Meta’s “sole resolution maker” and controlling shareholder since 2006, he shortly nodded his head twice and mentioned, “Yes.”
While Matheson’s line of questioning at occasions felt monotonous, it appeared a minimum of partly meant to offer historic context for Chief Judge 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 inner emails by which Zuckerberg warned colleagues that Instagram’s early rise was “actually scary” for Facebook. In different emails, he complained concerning the sluggish tempo of improvement of Facebook’s personal photographs app, Facebook Camera, and described members of the workforce as “checked out.”
“We really want to get our act collectively shortly on this since Instagram’s rising so quick,” Zuckerberg wrote in one other inner e-mail proven to the court docket. In a separate change with an engineering government engaged on Facebook 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 following few years they may simply add items of their service that duplicate what we’re doing now.”
In court docket, Zuckerberg downplayed the menace Instagram posed to Facebook on the time. “Yeah, after all,” he mentioned in response to Matheson asking if each apps had been competing to attach buddies with one another. “Was that the principle factor that was occurring? Not to my recollection.”
The FTC’s case hinges on the argument that Meta has a monopoly within the US on “private social networking providers,” 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 providers, the FTC claims that Meta owns almost 80 p.c of lively customers out there.
During Meta’s opening arguments, the corporate’s lead lawyer Mark Hansen argued that the FTC’s market definition is artificially slim by excluding TikTookay, iMessage, and different providers. He known as the case “a seize bag of FTC theories at struggle with the details and at struggle with the legislation.”
A typical technique in antitrust instances is for an organization to decrease its affect to seem much less monopolistic. In Meta’s view, the marketplace for person consideration is way broader than the FTC’s definition. Hansen offered inner Meta information exhibiting how Facebook and Instagram utilization soared when TikTookay was briefly offline within the US earlier this yr. And when Facebook had a worldwide outage in 2021, he offered information exhibiting that YouTube’s utilization elevated way over Snapchat’s.
Even if it may possibly show that Meta has monopoly energy in a related market, the FTC can even have to point out over the approaching weeks that the corporate illegally acted to attain or preserve its dominant place.
To hear Meta retell it, the corporate noticed alternatives the place it might make investments and develop fledgling merchandise into now-massive apps used world wide. But the FTC argues that, like Zuckerberg’s early refusal to promote to MySpace, Instagram and WhatsApp would have been simply high-quality on their very own.
At the top of the day, because the FTC’s Matheson was nonetheless quizzing Zuckerberg about his intent behind shopping for Instagram, Judge 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 depart the room earlier than everybody else began submitting out — one other try for the CEO to get forward of the fray.
