(Bloomberg) – Mark Zuckerberg said Bondendance Ltd.
“We are observing a sharp decline in our growth,” Meta’s CEO said Wednesday. “It’s very urgent and it has been a top priority for the company for several years.”
Zuckerberg spent seven hours in the past two days being questioned by government lawyers who urged him to revisit the company’s struggles — and then Facebook Inc. to keep up with the boom of mobile apps over the past decade. This led to the company’s purchase of Instagram and WhatsApp 10 years ago, and in response to Tiktok, the company launched Instagram’s reel video product in 2020.
The FTC hopes to force Meta to sell the apps as it attempts to portray Zuckerberg as a savvy executive who illegally monopolized part of the social media market by buying companies instead of competing with them. Now, in response to his attorney Mark Hansen, he can tell his story without looking back.
“People will share in new ways in five years, not what is happening today,” Zuckerberg said.
Zuckerberg said Meta competes with a range of platforms, including Google’s YouTube and Apple Inc.’s Imessage, as well as X, Telegram, Microsoft Corp.’s LinkedIn, among others. The FTC insists that Meta competes only with Snapchat from Snap Inc. in a narrow market for sharing information with friends and family.
Part of the FTC, in the case of a technical concept involving the “network effect,” means that users like Meta are more likely to retain dominance because people are unlikely to convert it into services used by a few.
U.S. District Court Judge James Boasberg presided over the non-jury trial in Washington and remained silent during the inquiry, but interjected during Zuckerberg’s testimony Wednesday to ask if the network effect is really important.
“How important is it if your friends are on a specific platform, if you can send content out from that platform? Why is your friends having a relationship there?” said the judge.
Zuckerberg said no. “These applications are now primarily used as discovery engines,” he said. “People can bring this content to the messaging engine.”
If FTC prevails, Instagram and WhatsApp derivatives will undo the integration between the apps, undermine the world’s two most popular digital consumer products and potentially remove hundreds of billions of dollars in Meta market value. This will also raise serious questions about how the government evaluates and approves the transaction.
Earlier this week, FTC attorney Daniel Matheson conducted a combative inquiry earlier this week, with Zuckerberg trying to redirect the statements he made in his previous internal communications.
Zuckerberg admitted in a 2013 email that in Facebook ads, he wrote about messaging apps, Kakao and Line, who wrote about “trying to build social networks to replace us.” However, in the stands this week, he said: “It’s hard for me to express their intentions.”
When Hansen asked him how to evaluate the competitive threat posed by Instagram and others in the deal, he mentioned the famous quote from former Intel CEO Andy Grove, saying “Only paranoids can survive.”
Matheson also tried to prove that Meta (then called Facebook Inc.) was aware of its antitrust risks a few years ago, including a possible breakup, showing an email from Zuckerberg when Zuckerberg wrote: “As the call for big tech companies is growing, there are non-polite opportunities we will be forced to break away from Instagp on Instagram and WhatsApp and stand out for the next 5-10 years.
More stories like this are available Bloomberg.com
