Meta’s Zuckerberg eyed Instagram spin-off amid antitrust scrutiny

WASHINGTON: Meta CEO Mark Zuckerberg considered spinning off popular photo-sharing app Instagram in 2018 in anticipation of possible antitrust scrutiny, according to a document shown at a trial in Washington, DC, on Tuesday.

The document was shown during Zuckerberg’s second day of testimony at the high-stakes trial, in which the US Federal Trade Commission is seeking to unwind Meta’s acquisitions of prized assets Instagram and WhatsApp.

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“I wonder if we should consider the extreme step of spinning Instagram out as a separate company,” Zuckerberg said in a memo discussing potential strategies for how to reorganize the social media company’s family of apps.

“As calls to break up the big tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps Whatsapp in the next 5-10 years anyway,” he wrote.

The case, filed during President Donald Trump’s first term, is widely seen as a test of the new Trump administration’s promises to take on Big Tech companies.

Zuckerberg testified earlier in the day that Meta bought Instagram because it had a “better” camera than the one his company was trying to build under its flagship Facebook brand at the time.

The acknowledgement appeared to bolster allegations by US antitrust enforcers that Meta had used a “buy or bury” strategy to snap up potential rivals, keep smaller competitors at bay and maintain an illegal monopoly.

Asked by an attorney for the FTC whether he thought fast-growing Instagram could be destructive to Meta, then known as Facebook, Zuckerberg said he believed Instagram had a better camera than what his company was building.

“We were doing a build vs. buy analysis” while in the process of building a camera app, Zuckerberg said. “I thought that Instagram was better at that, so I thought it was better to buy them.”

The company argues that his past intentions are irrelevant because the FTC has defined the social media market inaccurately and failed to account for stiff competition Meta has faced from ByteDance’s TikTok, Alphabet’s YouTube and Apple’s messaging app.

Zuckerberg also acknowledged that many of the company’s attempts at building its own apps had failed.

“Building a new app is hard and many more times than not when we have tried to build a new app it hasn’t gotten a lot of traction,” Zuckerberg told the court.

“We probably tried building dozens of apps over the history of the company and the majority of them don’t go anywhere,” he said.

Zuckerberg’s testimony comes as Meta is defending itself years after the release of damning statements plucked from Facebook’s own documents, like a 2008 email in which he said “it is better to buy than compete.”

The FTC accuses Meta of holding a monopoly on platforms used to share content with friends and family, where its main competitors in the United States are Snap’s Snapchat SNAP.N and MeWe, a tiny privacy-focused social media app launched in 2016.

Platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube and Reddit, are not interchangeable, the FTC argues.

Zuckerberg also disputed the FTC’s claim that Meta is able to show users more ads because it lacks competitors, another key pillar of the case.

While antitrust lawsuits typically look to a monopolist’s ability to raise prices on customers, the FTC has pointed to Meta’s ability to lower the quality of apps that users access for free, such as by increasing the number of ads.

Zuckerberg pushed back on the idea that more ads equals a worse user experience, saying that ads on Meta’s apps have improved and its system is designed to “show more ad content to people who like seeing ad content.”

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Meta has even contemplated introducing a feed that was all ads, Zuckerberg suggested under questioning by FTC attorney Daniel Matheson.

“I think we have discussed it at different points but I don’t think we have done it,” Zuckerberg said.