The recent scrutiny by the United States Federal Trade Commission (FTC) against Meta for alleged antitrust practices in the social networking market aims to compel Meta to divest its Instagram and WhatsApp business units. The FTC’s lawyers are attempting to emphasize that when Facebook acquired Instagram and WhatsApp, it was to maintain its dominance in the social networking business.
Emails from Facebook’s internal communication in 2011-2012, featuring CEO Mark Zuckerberg’s views on Instagram, suggest that Facebook perceived Instagram as a strong force at the time and wanted to either acquire the business or eliminate it, aligning with the FTC’s argument that Facebook sought to reduce competition.
TechCrunch gathered excerpts from emails indicating Zuckerberg’s concerns about Instagram’s rapid growth, with users uploading 30k photos daily within just four months, painting a picture of Instagram’s strong performance in the mobile market. The suggestion that if Instagram continued excelling in the mobile market, a potential acquisition by Google could pose a threat to Facebook’s dominance, highlighting the current growth rate being double of Facebook’s.
Subsequent emails floated the idea of acquiring Instagram, even at a high price of $500 million, due to its unique features like quality cameras and photo-sharing emphasis, which Facebook lacked. Contemplations included the consideration of user preferences for sharing beautiful photos without necessarily posting them on Facebook, indicating the need for strategic acquisitions.
The suggestion to let Instagram operate independently while integrating features back into the Facebook platform to prevent creating space for new competitors resonates with the strategy discussions during the acquisition. It raises the question of whether purchasing businesses provides long-term value and strengthens the platform against potential competitors in the future.
Additional apps like Path, Pinterest, Evernote, Foursquare were also reportedly of interest for acquisition by Facebook, as revealed in the emails.
TLDR: The FTC’s case against Meta focuses on potential antitrust concerns in the social networking market, particularly regarding the acquisitions of Instagram and WhatsApp by Facebook. Internal communication from Facebook hints at the strategic motivations behind these acquisitions, with considerations for competition and market dominance. Discussions also delve into the value of acquiring businesses and integrating their features into the existing platform to maintain market strength. Other apps like Path, Pinterest, Evernote, and Foursquare were also on Facebook’s radar for potential acquisitions.
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