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Instagram co-founder Kevin Systrom accused Mark Zuckerberg of suppressing the photo-sharing app with testimony backing up anti-trust regulators in an exclusive exam that could lead to the breakup of Meta.
Systrom, a leading witness called by the US Federal Trade Commission, told federal court in Washington on Tuesday that it failed to provide enough resources to realize Instagram’s growth potential after it acquired it for $1 billion in 2012.
The charges at the heart of the lawsuit brought by anti-trust agencies accused Meta of building and maintaining part through the acquisition of nascent rival Instagram.
According to a confidential email Zuckerberg wrote to the court in 2018, the FTC alleges that in order to avoid Facebook’s “network collapse,” Meta tried to stunt the app’s growth in order to avoid Facebook’s “network collapse.”
Systrom said Zuckerberg’s belief that Instagram is “harming Facebook’s growth” was the “major driving force behind Meta’s 2018 CEO’s decision.
“There was a dramatic softness when it comes to our daily active users (on Facebook) and everyone had a reason for that,” he added. “Mark Zuckerberg and (meta-executive) Chris Cox believed it was Instagram’s growth that contributed to the softness.”
Systrom said that he didn’t provide meta to staff who he thought was necessary to grow Instagram was “one of the reasons” he left in 2018.
The FTC lawyer presented an email in 2017 that Systrom wrote about Staff Meta boosting the development of the video. “We were given zeros of 300 incremental video heads, an unacceptable offensive outcome,” he writes.
Meta said Tuesday: “The acquisition documents and long-standing documents reviewed by the FTC over a decade ago do not obscure the reality of competition to face, overcome or overcome weak cases of FTC.”
Meta’s lawyers began cross-examination of Systrom Tuesday afternoon, claiming that the social media company helped accelerate growth on Instagram.
Systrom left in September 2018 with Mike Krieger, another co-founder of Instagram, but according to reports at the time, he is increasingly unhappy with Zuckerberg’s decision to fuse Facebook and WhatsApp systems with whatsapp systems on a drive that creates a “family of apps.”
Their exit follows the departures in 2017 and early 2018 of WhatsApp co-founders Jan Koum and Brian Acton. Meta’s $19 billion WhatsApp acquisition in 2014 is also under scrutiny in the case of the FTC.
Zuckerberg, who testified last week, claims that Instagram and WhatsApp were acquired to accelerate growth.
However, Systrom said Instagram was growing – not too fast, but added that the app remains independent, “may be on Facebook for a year.”
During Systrom’s cross-examination, Meta’s representative lawyer Kevin Huff stressed that Instagram added “more” features after the acquisition, benefiting users. He also pointed out measures implemented by Meta, which helped to increase engagement on Instagram. For example, you are not charging your Instagram to promote on Facebook, indicating that Facebook users are not reading content in the photo sharing app.
Systrom has agreed to help Instagram monetize independently and faster with access to Meta’s advertising system.
He said Meta was the “best” growth team, “hopefully able to work with them.”
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Systrom suggested that his tense relationship with Zuckerberg could have contributed to regaining Instagram resources. “Every company needs to trade-offs, but… (it felt like something else was going on.”
He claimed that Meta bosses “have always been happy to have Instagram in their family, but as a founder of Facebook, I also felt a lot of feelings like Instagram or Facebook.”
Zuckerberg considered spinning Instagram, according to a 2018 email filed in court last week. It writes that Systrom can be maintained and “quickly stop growing artificially in ways that damage your Facebook network.”
