Regulation Archive

Olivan describes a “huge chain of ifs” that might have led Google to becoming a significant social player in at least some countries around the world, had it acquired WhatsApp — something he and other Facebook execs feared in 2012. Two of those “ifs” would be if Google would run a social app without killing it, and whether it could convince WhatsApp’s founders to add social features, which they infamously resisted.

“The plan was to figure it out down the line,” Olivan testifies about the $19 billion acquisition. After all, he says. “Mark didn’t have a plan for how to monetize Facebook when he started it, either.”

In 2013, the company’s-then director of corporate development Amin Zoufonoun wrote that perhaps Facebook needs “a separate, free sms focused and branded messenger product to compete in this space if we cannot buy whatsapp. Zoufonoun worried “that FB messenger, with its legacy connotations may not do it in the space defined by whatsapp no matter what we do.” Olivan, who had recently taken over the Messenger team, advocated for improving the existing app, instead.

Even though Facebook closely tracked WhatsApp’s growth in 2012 and 2013 alongside other mobile messaging apps — some of which were adding social features — Olivan says they were not concerned about WhatsApp trying to become a social network. The app only aimed to be a replacement for SMS messaging in countries where telcos charged high rates for the service, Olivan testifies. Still, several documents show Facebook executives tracking WhatsApp’s growth with concern about how it stacked up to Facebook Messenger’s.

Olivan opposed letting competing messenger apps advertise on Facebook’s platform because he worried it was a bad tradeoff to a make a quick buck. He’s testified repeatedly he doesn’t like to help competitors, and wrote in a 2013 email that “we will look like complete idiots if we lose our business to these messenger services and help them along the way for a couple of $s.” He testifies he was “being a bit hyperbolic.”

Olivan testifies that he was “paranoid” as head of growth in 2012 about the expansion of mobile messaging apps into social apps, especially in countries where Facebook’s flagship app had less of a stronghold. In a 2012 message, Olivan told a colleague he worried that the shift to mobile combined with “messengers growing organically with huge retention and virality = potential recipe for not be around in a couple ... years from now.”

Olivan, who previously managed Facebook’s messaging efforts, asked staff in a 2012 email to “compile a ‘this shit is getting scary deck’ given all the data we have now” about the growth of messaging apps worldwide, which were also adding social features. Olivan wanted to circulate the deck to Facebook leadership “with a message: we really need to double down on messenger / our messenger is broken.”

Olivan is poking holes in the FTC’s market definition which relies on the way users come to Facebook and Instagram to connect with friends and family they know in real life. He says he’s actually been surprised to learn there’s some users who engage on Facebook without any connections at all — though he can’t say how many people that is.

Microsoft Azure executive Jason Vallery gives even more detail about how cloud services can help companies efficiently run their businesses at relatively low cost, even without their own massive data centers. Again, this speaks to the FTC’s argument that a company like Instagram could have scaled without Meta’s help. In a 2023 deposition, Vallery talks about how customers use cloud services for their cost, capability, and security benefits.

In a 2023 deposition, AWS general manager for sales Jason Bennett testified about how companies use its services to run their businesses. Instagram used AWS prior to its acquisition, but we’ve also heard from other AWS customers like Pinterest and Reddit. The testimony seems meant to demonstrate that Instagram theoretically could have scaled with AWS, even without access to Meta’s infrastructure.

Benjamin Davenport, who became part of Facebook Messenger’s founding team after his mobile messaging app Beluga was acquired, testified in a 2022 deposition that he worried in 2012 that Google could acquire WhatsApp and “bake it into Android.” Google could then make WhatsApp the default option on the operating system, and quickly growing its distribution, he says. Davenport wrote in a 2012 message that Google could create “a cross-platform iMessage with a far larger network.”

In a 2017 competitive assessment, Pinterest warned that Instagram was “taking direct aim at our core turf.” On cross-examination, Meta is working to show that Pinterest actually does see itself in direct competition with its products. At the time, Pinterest noted there was a “rapid increase in customer overlap” with Instagram and the app was even “replicating” some of its own features, like the ability to save pictures.

The FTC has asked several witnesses today about their trust and safety operations and infrastructure investments, which might be a way to show that even apps without Meta’s backing can maintain robust operations — just as Instagram might have. Roberts testifies, for example, that she’s not aware of any concerns that staying on AWS servers would limit Pinterest’s growth in the future.

The app changed its category in the Apple app store from social to lifestyle around 2018, Roberts testifies. “When users come to Pinterest expecting it to be like other social media apps, they tend to be confused about how to use the product since people are not really forefront of the experience,” she says — it’s more about finding things they’re interested in. “It just doesn’t set the right expectation if people have a mental model of another social media company when they come to Pinterest.”

For our third live social media witness of the day, Pinterest’s former director of product management Julia Roberts is testifying about how the app caters its product to users. The FTC is highlighting how Pinterest is focused around users’ interests, rather than connecting with friends and family — an element it says is core to Meta’s dominance. Roberts testifies, for example, that unlike on a platform like Instagram, “following is not a big part of the Pinterest experience.”