“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 replicate 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 following 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 compelled 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 verify that he has been Meta’s “sole choice maker” and controlling shareholder since 2006, he rapidly nodded his head twice and stated, “Sure.”
Whereas Matheson’s line of questioning at occasions felt monotonous, it appeared at the least partly supposed to supply historic context for Chief Choose 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 gradual tempo of growth of Fb’s personal images app, Fb Digicam, and described members of the crew as “checked out.”
“We actually have to get our act collectively rapidly 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 government engaged on Fb Digicam, 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 might simply add items of their service that duplicate what we’re doing now.”
In courtroom, Zuckerberg downplayed the risk Instagram posed to Fb on the time. “Yeah, after all,” he stated in response to Matheson asking if each apps have been competing to attach pals with one another. “Was that the principle 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 contains 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 p.c of lively customers out there.
Throughout Meta’s opening arguments, the corporate’s lead lawyer Mark Hansen argued that the FTC’s market definition is artificially slim by excluding TikTok, iMessage, and different companies. He known as the case “a seize bag of FTC theories at warfare with the information and at warfare with the regulation.”
A standard 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 far broader than the FTC’s definition. Hansen introduced inside Meta information exhibiting how Fb and Instagram utilization soared when TikTok was briefly offline within the US earlier this yr. And when Fb had a worldwide outage in 2021, he introduced information exhibiting that YouTube’s utilization elevated excess of Snapchat’s.
Even when it could show that Meta has monopoly energy in a related market, the FTC will even have to indicate over the approaching weeks that the corporate illegally acted to attain or preserve its dominant place.
To listen to Meta retell it, the corporate noticed alternatives the place it may make investments and develop fledgling merchandise into now-massive apps used world wide. 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, Choose 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.
