‘Killer acquisitions’: Zuckerberg first witness in landmark US antitrust case

Mark Zuckerberg argued in federal court that his company’s social networks aren’t just about friends, taking the stand as the first witness for the US Federal Trade Commission’s (FTC) antitrust trial.

Allowing people to connect with friends and family “remains one of our priorities”, Zuckerberg said. However, “we’ve always been a service that lets you discover and learn about what’s going on in the world”.

Mark Zuckerberg told a court the creation of the Facebook news feed was to facilitate “real connections to actual friends”.Credit: NYT

The FTC is seeking to break up Meta Platforms, saying its acquisitions of Instagram and WhatsApp in 2012 and 2014 respectively gave it an illegal monopoly on sharing with friends and family. Zuckerberg disputed the FTC’s allegations, saying Meta competes with a wider range of social media companies that the company has said include YouTube, TikTok and Snap.

In questioning by FTC lead trial lawyer Daniel Matheson, Zuckerberg described the creation of the Facebook news feed in 2006 to facilitate “real connections to actual friends”.

Around the mobile app boom between 2010 and 2012, Zuckerberg struggled to get his teams to build quality products for photo-sharing.

Matheson displayed emails from Zuckerberg expressing concern that it was far behind Instagram, including a June 2011 message stating they need to “get their act together quickly”.

In September that year, he said: “If Instagram continues to kick ass on mobile or if Google buys them, then over the next few years they could easily add pieces of their service that copy what we’re doing now and if they have a growing number of people’s photos, then that’s a real issue for us.”

In February 2012, Zuckerberg wrote a message contemplating a purchase of Instagram “even if it costs ~$500m”.

On the stand

Zuckerberg, 40, walked in with his assistant, wearing a navy suit and a powder blue tie. The courtroom was full when he started his testimony, but spectators have been filtering out as the questioning continued.

The trial started earlier on Monday with opening statements from both sides, with Chief Judge James Boasberg presiding. Agency lawyers began their arguments by invoking a long US tradition of seeking to ensure a competitive marketplace, one that the FTC has accused Meta of violating.

“For more than 100 years, American public policy has insisted firms must compete if they want to succeed,” Matheson said in his opening statement. “The reason we are here is that Meta broke the deal.”

If the FTC prevails, a spin-off of Instagram and WhatsApp would undo years of integration between the apps; it would disrupt two of the most popular digital consumer products in the world; and it could erase hundreds of billions of dollars in Meta’s market value. It would also raise serious questions about how the government evaluates and approves deals.

The trial is expected to last about two months and to also feature testimony from former Meta executive Sheryl Sandberg.

The company on Monday said it faced fierce competition from several other services, especially as social media became more about entertainment than friends and family, and that it had provided demonstrable benefit to its users.

A final decision will hinge on how social media is defined, and whether Meta dominates that market. The FTC will focus on how people communicate with friends and family – what it calls the “personal social networking services” market, which it claims is composed primarily of messages and media shared between close contacts.

‘Killer acquisitions’

The FTC says Meta’s purchases of Instagram and WhatsApp are “killer acquisitions” that prevented those companies from competing. To support its case that Meta is a monopoly, the FTC will say the quality of its apps has declined, most noticeably with increased ads and weakened privacy protections.

In 2010, “Meta was faced with a sea change in competitive conditions”, Matheson said, referring to the growing mobile market. “They decided that competition was too hard and it would be easier to buy out their rivals than to compete with them.”

Meta bought WhatsApp in part to fend off an offer from Alphabet’s Google, which was also considering buying the company, according to Matheson. And Meta also considered buying Snap for $US6 billion in 2013, though the Snapchat owner turned the offer down. The number was not previously known, as reports at the time pegged the discussions as for half that much.

A Snap representative declined to comment.

In his opening argument, Matheson said the FTC would highlight “smoking gun” emails from Meta executives including Zuckerberg, particularly one from 2012 where he described the Instagram deal as a way to “neutralise a competitor”.

After Meta bought Instagram, it “fundamentally manipulated the experience” offered by the service, Matheson said, allowing it to avoid cannibalising its own more profitable Facebook product. While that was a “rational business decision”, Matheson said it “offends the policy” of the antitrust laws.

Multiple competitors

Meta has pushed back aggressively against the FTC’s claims, saying it competes intensely with a variety of platforms, including ByteDance’s TikTok, Snap’s Snapchat, Google’s YouTube, Apple’s iMessage and Elon Musk’s X. The FTC’s case is “at war with the facts and at war with the law”, said Meta lawyer Mark Hansen in his opening remarks, noting that of all Meta’s competitors, Matheson mentioned TikTok only once in his opening statement.

The agency says that only Snapchat competes with Meta, and that a number of other past competitors, including MySpace, are now defunct.

Hansen said consumers’ use of the apps had changed dramatically over time, shifting to more passive engagement such as video through Instagram’s Reels, YouTube’s Shorts and TikTok. While the FTC is focused on people’s use of the services to communicate with friends and family, Hansen said that use had dropped precipitously. Less than 20 per cent of Meta customers use the services for those functions in 2025.

Bloomberg

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