April 23 - Meta (META, Financial) saw a solid boost in pre-market trading on Wednesday, even as it faces fresh criticism in a high-profile antitrust case about how it handled Instagram's growth.
Kevin Systrom, Instagram's co-founder, testified in a Washington federal court that Meta, after buying Instagram for $1 billion in 2012, held back resources that could have helped the app grow. Systrom said Meta was worried that Instagram would hurt Facebook's growth, so in 2018, it took away key tools that initially helped Instagram expand. This, he explained, led to both his and co-founder Mike Krieger's decision to leave the company that year.
Despite these claims, Meta's stock jumped around 4%. In response, Meta's legal team pointed out that Instagram had grown from a small, cash-strapped startup to a major platform under its ownership, thanks to the company's support.
The Federal Trade Commission (FTC) is now investigating Meta's acquisitions of Instagram and WhatsApp over concerns they might have stifled competition. The FTC is suing Meta for damages and could even push for a breakup of the tech giant.
