In a second day on the stand of a landmark antitrust trial, Mark Zuckerberg, the chief executive of Meta, said on Tuesday that he bought Instagram and WhatsApp because it was difficult to build new apps and dodged questions about whether he was trying to snuff out competitive threats to his company.
“Building a new app is hard,” he said when asked why, in one 2012 email that was presented, he had seemed intent on buying Instagram. “We’ve probably tried building dozens of apps over the history of the company, and the majority of them don’t go anywhere.”
“We could have built an app,” he added. “Whether it succeeded or not is a matter of speculation.”
Mr. Zuckerberg’s testimony is central to the antitrust trial, being held in the U.S. District Court for the District of Columbia. The chief executive spent several hours on Monday answering questions from lawyers as they tried to make the case that Mr. Zuckerberg saw the other apps as rivals that he needed to take out. During the questioning, which at times became contentious, Mr. Zuckerberg frequently said he didn’t remember his thought process for certain emails.
The case, Federal Trade Commission v. Meta Platforms, poses a consequential threat to Mr. Zuckerberg’s business, which he co-founded as Facebook in his Harvard dorm room in 2004. The F.T.C. is asking Judge James E. Boasberg, who is presiding over the case, to find the company guilty of using a “buy or bury” strategy to kill off competition by acquiring nascent rivals like Instagram and WhatsApp. Meta bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
If successful, the government is likely to ask the judge to break up Meta through selling off the two apps.
Still, legal experts cautioned, the F.T.C. faces an uphill climb to win. The government is asking the judge to look back more than a decade and find that Meta stayed powerful by quashing competitors through its acquisitions. Regulators approved the Instagram and WhatsApp deals at the time, raising questions about why, experts said.
In his testimony on Tuesday, Mr. Zuckerberg defended Meta’s acquisition of Instagram, describing the transaction as business as usual for a tech company. He said it was typical for businesses to weigh the benefits and costs of developing new products internally versus buying start-ups with products they wanted to add.
“We were doing a build-vs.-buy analysis,” Mr. Zuckerberg said, referring to Instagram, which competed with Facebook’s Camera app. “I thought that Instagram was better at that, so I thought it was better to buy them.”
The suit against Meta is part of a broader push by U.S. regulators to rein in the power of the largest tech companies. The F.T.C. has also sued Amazon, accusing it of protecting a monopoly by squeezing sellers on its vast marketplace and favoring its own services.
The Department of Justice won a suit last year accusing Google of maintaining a monopoly in search, and a proceeding is set for next week to determine remedies for the violations. The department has sued Google over its dominance in ad technology as well. Apple was also a target of a suit by the government, which accused it of making it difficult for iPhone and iPad users to leave its ecosystem.
During opening statements in the Meta trial on Monday, the F.T.C. said the company’s purchases of Instagram and WhatsApp cemented its power, depriving consumers of other social-networking options and edging out competition.
Meta’s lawyers denied the allegations in opening statements, countering that the company faces plenty of competition from TikTok and other social media platforms. Trying to unwind the mergers after they had been approved a decade ago would set a dangerous precedent, the lawyers added.
On Tuesday, lawyers for the F.T.C. pressed Mr. Zuckerberg to explain internal communications that preceded the purchases of Instagram and WhatsApp. His notes — some of which date back 15 years — detailed fears about how his social media company, then known as Facebook, could compete on mobile devices.
Mr. Matheson pointed to email correspondence from 2012 between Mr. Zuckerberg and his top executives in which they traded candid thoughts on employee performance, potential and past acquisitions, and the threat of upstart competitors.
In one email, Mr. Zuckerberg told Sheryl Sandberg, Meta’s chief operating officer at the time, that he could teach her to play Settlers of Catan, a popular board game. He went on to criticize some lieutenants, saying their lagging performance was one reason they needed to buy Instagram for $1 billion.
“A billion dollars is very expensive,” Mr. Zuckerberg said on the stand.
In another email, in 2013, Mr. Zuckerberg told executives to block foreign competitors, including popular Asian messaging apps like Kakao and WeChat, from advertising on Facebook.
“Those companies are trying to build social networks and replace us,” he wrote. “The revenue is immaterial to us compared to any risk.”
The F.T.C. also pointed to a 2018 email in which Mr. Zuckerberg warned executives that government antitrust concerns could be problematic for Meta.
“I’m beginning to wonder whether spinning Instagram out is the only structure that will accomplish a number of important goals,” Mr. Zuckerberg wrote. “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.”
“On the flip side, while most companies resist breakups, the corporate history is that most companies actually perform better after they’ve been split up,” Mr. Zuckerberg added.
