In the initial week of the Meta antitrust trial, new insights emerged regarding how the company, formerly known as Facebook, responded to the competitive risks presented by Instagram during the early 2010s. The U.S. government has accused Meta of contravening competition laws through acquisitions of companies such as Instagram and WhatsApp, which were perceived as threats to Facebook’s dominance. Should the U.S. Federal Trade Commission (FTC) succeed in its litigation, Meta could be compelled to divest from Instagram and WhatsApp.
Throughout the trial, the FTC presented evidence illustrating Facebook’s acute awareness of Instagram’s growing popularity as a significant risk to its business. Internal documents reveal that Facebook executives expressed concern over Instagram’s growth and deliberated on potential acquisition strategies.
Furthermore, Facebook’s executives considered various approaches to restrict Instagram’s expansion, including replicating its features, launching their own app, or acquiring Instagram and stalling its feature development while focusing on in-house projects. These discussions, as presented by the government, reflect Facebook’s strategy to either acquire or undermine competitive threats. The correspondence highlights the aggressive business tactics that have contributed to Meta’s rise as a major player in social networking.
Highlights from these communications include concerns from Mark Zuckerberg and other executives about Instagram’s rapid growth. For instance, in February 2011, Zuckerberg noted the app’s swift user increase and the necessity to monitor it closely. By September 2011, he expressed worry that Instagram’s mobile success could threaten Facebook, anticipating a doubling of Instagram’s user base within months.
In 2012, considerations of acquiring Instagram were evident, with Zuckerberg contemplating a purchase for approximately $500 million, acknowledging Instagram’s superior photo-centric sharing network and camera functionalities. Discussions with Samuel W. Lessin, a former Facebook VP of Product, also suggested acquiring other successful platforms to secure talent and integrate their features into Facebook, thereby mitigating competitive threats.
Zuckerberg also proposed that by acquiring platforms like Instagram and others, Facebook would effectively be “buying time,” allowing them to integrate these technologies and stay ahead of emerging competitors.
Overall, these revelations present a vivid picture of Facebook’s strategic maneuvers and hint at the underlying concerns that drove its acquisition decisions in the early 2010s.
