Meta Platforms (META, Financials) Chief Executive Officer Mark Zuckerberg testified in a federal courtroom on Monday, defending the company's acquisitions of Instagram and WhatsApp as the Federal Trade Commission seeks to prove the deals were part of a strategy to eliminate competition in the social networking market.
The trial, which began in Washington, marks a significant legal test for federal antitrust enforcement and could potentially force Meta to divest two of its most successful platforms. Zuckerberg, called as the first witness by the FTC, addressed internal communications that the agency says reveal concerns about Instagram's rapid growth and Meta's lack of progress on similar products before acquiring the company in 2012.
FTC attorney Daniel Matheson presented messages showing Zuckerberg's dissatisfaction with the company's internal efforts to compete in the photo-sharing space. Zuckerberg responded that he was highlighting performance issues rather than expressing acquisition motives.
When asked about Instagram's treatment after the acquisition, Zuckerberg denied neglect, stating that Meta invested substantially in the platform post-purchase. He also challenged the framing of discussions about focusing on Facebook over Instagram, arguing they were not formal strategies.
The FTC alleges that Meta followed a long-standing approach of acquiring emerging competitors instead of developing rival products, referencing a 2008 statement by Zuckerberg that it is “better to buy than compete.” The agency says this strategy created barriers for new entrants and stifled innovation, particularly as users migrated from desktop to mobile platforms.
Meta, in its defense, argues that the market is far broader than the FTC defines, pointing to competitors such as TikTok, YouTube, Apple's iMessage, and X (formerly Twitter). The company maintains that regulators cleared the acquisitions over a decade ago and that the current lawsuit undermines finality in mergers and penalizes past decisions that were lawful at the time.
Meta also noted in a recent court filing that the FTC must prove the company holds monopoly power today—not in the past—underscoring the growth of rival services over the years.
U.S. District Judge James Boasberg, who denied Meta's request for summary judgment in late 2024, is overseeing the trial. If the court rules against Meta, the company could be required to divest Instagram and WhatsApp, a move that could cut its advertising revenue significantly.
The outcome could have broader implications for other technology firms, as similar antitrust actions are pending against Alphabet (GOOGL, Financials) and Amazon (AMZN, Financials), signaling a new phase in federal efforts to challenge the market dominance of large tech companies.
