In 2018, Mark Zuckerberg floated the idea of spinning out Instagram, one of the remedies the Federal Trade Commission (FTC) will likely seek in Meta’s antitrust trial that began this week. CNBC reported on Tuesday that the comments from an email thread with executives came to light in Washington, DC.
“I’m beginning to wonder whether spinning Instagram out is the only structure that will accomplish a number of important goals,” Zuckerberg wrote in the email. “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.” His estimate, made six years ago, ended up being spot-on.
“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,” Zuckerberg added in the same email, according to The New York Times.
It’s Zuckerberg’s second day of testimony in the trial, which stemmed from a 2020 government lawsuit against Meta (then still known as Facebook). The FTC argues that the company’s purchases of Instagram (for $1 billion in 2012) and WhatsApp (for $19 billion in 2014) hurt competition. If the trial goes the FTC’s way, it will likely ask the judge to break up Meta by selling off one or both of the apps.
Last April, Meta moved to dismiss the case, but US District Judge James Boasberg allowed it to proceed with a narrower scope.
On the stand on Tuesday, the Meta CEO reportedly defended the company’s Instagram purchase as the result of a standard cost-benefit examination. “We were doing a build-vs.-buy analysis,” Zuckerberg said. “I thought that Instagram was better at that [than Facebook’s Camera app], so I thought it was better to buy them.”
“Building a new app is hard,” he said when asked on the stand why he was 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.”
Other details that came to light on Tuesday include a 2013 email in which Zuckerberg told executives to block Asian competitors 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.”
