Antitrust

The Meta CEO is testifying about a February 2012 exchange with then-CFO David Ebersman, who said one (potentially bad) reason to buy a company is to “neutralize a potential competitor.” Seeming to ignore Ebersman’s opinion, Zuckerberg said that was one of the reasons he’d actually consider buying Instagram.

The government just posted slides from its opening statement. They give a good roadmap of who we’ll hear from in the coming weeks. The presentation also previews some of the internal Meta documents we’ll see and how the FTC thinks it can win its case.

In a February 2012 message, Mark Zuckerberg floated the idea of acquiring Instagram but not doing much with it so that new competitors wouldn’t creep into the market. On the stand, Zuckerberg deflects this as early thinking and says Facebook ultimately didn’t take this route. The FTC’s attorney points out that this was only a couple of months before the acquisition. From Zuckerberg’s message at the time:

Zuckerberg is walking through his mindset in February 2012 when he was considering acquiring the rapidly growing photo app. He asked colleagues if a purchase might be worth it even if it costs $500 million. “Theoretically we could go build this technology, but I’m worried we’re so far behind,” he wrote. Zuckerberg testifies he was considering this move ahead of their IPO when, for the first time, the company would have money to consider buying some products.

The FTC is pointing to internal messages from 2011 where Zuckerberg complained that the company was moving too slow on its Facebook Camera app while Instagram was growing rapidly. It turns out, according to messages from other executives at the time, that this was in part because Facebook had interns working on the critical project, rather than more experienced engineers.

There are no fireworks yet. The government is working to elicit answers that might help it establish its view that the relevant part of the social media market Meta dominates is about connecting with friends. Zuckerberg testifies that engaging with friends’ posts is not as much a part of the experience as it was in the past, but concedes that as the service has grown, it’s still a big part of users’ experiences in absolute terms.

The FTC just called the Meta CEO as its first witness. The government has budgeted several hours for him to testify, so he’ll likely cover a lot of ground.

The company accuses the government of backing into a view of the social media market that makes it look like a monopoly, while ignoring robust competitors. It also charted how TikTok’s brief time offline in the US led users to flee to other apps, including its own. See for yourself.

Meta’s attorney Mark Hansen paints the government’s case as one comprised of made-up theories about how both the social media market and the law work. He accuses the government of ignoring TikTok’s massive role in social media by excluding it from its definition of the market that Meta allegedly monopolized.

Prior to buying those nascent apps in 2012 and 2014, Facebook recognized both as significant competition, Federal Trade Commission attorney Daniel Matheson argues to open the government’s case.

I’m here with my colleague Alex Heath at the federal courthouse in Washington, DC where the Federal Trade Commission and Meta are set to lay out their opening arguments beginning at 9:30 AM Eastern Time. Meta is fighting charges that it illegally monopolized a subset of the social media market through its acquisitions of Instagram and WhatsApp years ago.

Mark Meador, a former staffer for Sen. Mike Lee (R-UT), was confirmed to the Federal Trade Commission. He’ll join Republican Chair Andrew Ferguson and Republican commissioner Melissa Holyoak. Meanwhile, the two Democrats President Donald Trump attempted to fire from the commission are fighting for their jobs back. Under the law, no more than three commissioners can be from a single party.

The Alphabet Workers Union’s announcement of the agreement follows an unfair labor practice charge it filed last year over Google restraining employees from discussing the trial. The company is due in court this month for the remedy phase, which could see it being forced to sell Chrome.

FTC staffers have continued to work on the investigation in recent weeks according to Bloomberg, a sign that Trump-appointed FTC Chairman Andrew Ferguson is going to prioritize scrutiny of tech giants.

That’s one of the minor changes the Justice Department made to its proposed final judgement in its antitrust case. The DOJ Antitrust Division is still operating under an acting chief as President Donald Trump’s nominee Gail Slater awaits confirmation. But so far, the government made only small tweaks to its asks based on discovery. It’s no longer asking that Google divest AI investments, for example, but that it give a heads up on future ones.

The DOJ sees the proposed acquisition of AI-native network company Juniper Networks as a way for HPE to scoop up a “smaller, innovative rival,” and further consolidate a market in enterprise networking. The companies called the DOJ’s assessment “fundamentally flawed” in a joint statement, and promised to defend the deal.

The Federal Trade Commission and Justice Department didn’t take a position on the appropriate outcome, but write in a statement of interest that holding a seat on two competing boards can violate antitrust law — even if the board member foregoes one. At issue is Reid Hoffman’s simultaneous participation on the OpenAI and Microsoft boards.

The Japan Fair Trade Commission is expected to announce that Google’s preferential Search deals with smartphone makers are anticompetitive, reports Nikkei Asia.

Kanter says he’ll step down on Friday, as the incoming Trump administration prepares to take over and confirm new leadership. His principal deputy Doha Mekki will take over in the meantime. Kanter highlighted the division’s accomplishments during his tenure, including winning an anti-monopoly suit against Google, and building out a litigation program to take strong cases to court.