A key part of Mark Zuckerberg’s defense in the most serious antitrust challenge in this week’s Meta history had little to do with the tech giants and nothing to do with Tiktok.
In three days of testimony, the billionaire technology founder repeatedly told US federal court in Washington that the video platform owned by China’s parent ordinance has grown to become a tremendous competitor.
His rival praise has the goal of repealing the US Federal Trade Commission claim that Meta retained an illegal monopoly, and if proven, accusing him of wider consequences than he faces Zuckerberg’s business.
Losing the case could force Meta to split the $1.5TN group and spin off Instagram and WhatsApp apps. Winning, and it won a decisive victory over regulators who had had a big skill for that purpose for a long time, and recently sued retail giant Amazon.
The trial comes after Zuckerberg did not negotiate the lawsuit in the first place. Those familiar with the issue said the FTC had demanded $30 billion as a potential settlement. Meta was low ball at $450 million, then raised the proposal to $1 billion after regulators set a $18 billion floor. The parties then decided to move to court.
At the heart of the FTC lawsuit is allegations that they adopted a “systematic strategy” to eliminate competitors, including acquiring Instagram and WhatsApp for $1 billion and $1.9 billion in 2012 and 2014, respectively.
FTC lawyers presented evidence this week that Zuckerberg viewed these early applications as threats that include hosting unpleasant emails. Zuckerberg in 2012 agreed to the suggestion that Instagram deals could help “neutralize competitors,” and said that Meta wanted “to use M&A to build a competitive moat around us with mobile and advertising.”
However, such tactics could only be considered potentially illegal if the FTC can first prove that Meta holds monopoly. This is the point that Zuckerberg and former Meta Chief Operating Officer Sheryl Sandberg focus on testimony, highlighting Tiktok’s explosive growth, serving more than 1 billion users worldwide.
“What they’ve said in the past doesn’t look great, but it doesn’t have much evident value as to whether Meta currently maintains exclusivity,” said Paul Swanson, head of antitrust and competition practices at the Netherlands & Heart.
“Zuckerberg and Sandberg did a good job explaining why it’s the current reality. (That) Tiktok and Meta are replaced by one another in the minds of most users and are replacing each other.”
In antitrust challenges, FTCs must prove that consumers were harmed. This would usually be a monopoly that pushes up prices. By offering the service for free, agents instead claim that consumers have degraded the user experience due to the platform’s advantage.
The key challenge for the FTC is to convince leader James Boasberg that Meta, a “personal social networking” market that focuses on friend-family connections that do not include Tiktoc or Google’s YouTube, that Meta is dominating through acquisition.
Those close to the previous settlement negotiations, first reported by the Wall Street Journal, said Meta’s lowball offer showed how weak the FTC case was. The FTC declined to comment.
“We weren’t embarrassed to explain why it didn’t make sense for the FTC to bring the cases needed to prove that an American 17-year-old child is absurd. Instagram is not competing with Tiktok. We are ready to win the trial.”
However, some experts argue that Boasberg, who has barely spoken words throughout the week, could embrace the FTC debate.
“The courts are clearly open to the possibility that there may be a personal social networking market,” said Kenneth Dintzer, partner in Crowell & Moring’s antitrust and competitive groups. He referenced a 2024 submission in which Boasberg said FTC “meets the burden of showing that other applications are not a reasonable alternative.”
Zuckerberg rejected this concept in court and pointed to a group rushing to develop a reel (short form video) in response to the rise of the meteors of Tiktok. The Tiktok offering “has been the highest competitive threat against Instagram and Facebook in the last few years,” Zuckerberg said.
Metabos also points to a dramatic jump of users following the deal, claiming WhatsApp and Instagram were acquired to accelerate growth.
The FTC rebutted in an email in 2013. Before trading on WhatsApp, Zuckerberg argued, “The biggest competitive vector for us is building messaging apps for some companies to communicate with small groups and turn it into a wider social network.”
After offering to teach Sandberg the board game, the Catan settlers said in a 2012 email:
“The confounding part of Mark’s testimony is that he is trying to contradict the statement he made 10 years ago today because these acquisitions were considered in real time,” said Lee Hepner, senior lawyer for the anti-monopoly nonprofit American Economic Freedom Project.
Perhaps the most prominent evidence came in 2018 in the form of a Zuckerberg email, where he considered spinning Instagram.
“A call to dissolve the growth of major tech companies,” he wrote, “there is no small chance of being forced to spin out Instagram and WhatsApp in the next five to ten years.”
