Mark Zuckerberg avoids explaining the takeovers of Instagram and WhatsApp at trial
In his second day on the stand in a landmark antitrust trial, Mark Zuckerberg, the chief executive of Meta, on Tuesday defended the social media company’s 2012 acquisition of Instagram, describing the transaction as business as usual for a tech company.
Businesses weigh the benefits and costs of developing new products themselves against buying start-ups with products they want to add, he said.
When Instagram was competing with his company’s now-defunct Camera app, “we were doing a build-vs.-buy analysis,” Mr. Zuckerberg said. “We were doing a build-vs.-buy analysis” when Instagram was competing with his company’s now-defunct Camera app, Mr. Zuckerberg said. He is the key witness in the antitrust trial in which the government accuses Meta for violating competition laws when it purchased WhatsApp and Instagram as part of a “buy-or-bury” strategy. He spent over seven hours on Monday and Tuesday answering questions from lawyers at the U.S. District Court for the District of Columbia, as they tried making the case that he viewed the other applications as rivals that he needed eliminate. The F.T.C. The F.T.C. Meta bought Instagram in 2012 for $1 billion, and two years later, in 2014, WhatsApp, for $19 billion. Zuckerberg acknowledged that a sale was possible in the past. Lawyers for F.T.C. presented an internal email that Zuckerberg wrote in 2018 warning executives that antitrust concerns may reshape Meta’s business. On Tuesday, Mr. Zuckerberg explained that “I wanted to be mindful of the fact that we should have the best strategy for the people that we’re trying serve, taking into consideration the direction that politics seemed to tell you at the time.” He said: “I just wanted to be mindful that we should have a strategy that creates the most value for the people we’re trying to serve, taking into account the direction that politics seemed to be telling you at that time.”
On Tuesday, he explained: “I just wanted a strategy which is creating maximum value for those who are trying us out. Taking into consideration what was being told by politicians at that time.”
Legal experts cautioned about how difficult it would be for F. The government wants Judge Boasberg, to look back over the past decade and determine that Meta remained powerful by squelching competitors through its acquisitions. Experts said that the approval of the Instagram and WhatsApp acquisitions by regulators at the time raises questions as to why. The F.T.C. The F.T.C. The Department of Justice has also sued Google for its dominance in advertising technology. Apple was also a target of a suit by the government, which accused it of making it difficult for iPhone and iPad users to leave its ecosystem.
During opening statements in the Meta trial on Monday, the F.T.C. said the company’s purchases of Instagram and WhatsApp had cemented its power, depriving consumers of other social-networking options and edging out competition.
Meta’s lawyers denied the allegations in opening statements, countering that the company faces plenty of competition from TikTok and other social media platforms. The lawyers said that trying to undo the mergers 10 years after they were approved would set a dangerous precedent. Mr. Zuckerberg was pressed to explain the internal communications that took place before the purchase of Instagram and WhatsApp. Mr. Zuckerberg frequently said during the questioning, which at times became contentious, that he didn’t remember his thought process for certain emails.
The F.T.C.’s lead litigator in the case, Daniel Matheson, pointed to correspondence from 2012 between Mr. Zuckerberg and his top executives in which they traded candid thoughts on employee performance, potential and past acquisitions, and the threat of upstart competitors.
In one email, Mr. Zuckerberg told Sheryl Sandberg, Meta’s chief operating officer at the time, that he could teach her to play Settlers of Catan, a popular board game. He went on to criticize some lieutenants, saying their lagging performance was one reason they needed to buy Instagram for $1 billion.
“A billion dollars is very expensive,” Mr. Zuckerberg said on the stand.
In another email, from 2013, Mr. Zuckerberg told executives to block foreign competitors, including popular Asian messaging apps like Kakao and WeChat, from advertising on Facebook.
“Those companies are trying to build social networks and replace us,” he wrote. “The revenue is immaterial to us compared to any risk.”
On the stand, where he is expected to resume his testimony on Wednesday, Mr. Zuckerberg continually pointed to the business reasons for buying the two young rivals.
“Building a new app is hard,” he said when asked why, in one 2012 email that was presented, he had seemed intent on buying Instagram. “We’ve probably tried building dozens of apps over the history of the company, and the majority of them don’t go anywhere.”
“We could have built an app,” he added. “Whether it succeeded or not is a matter of speculation.”
