Lauren Feiner

The FTC shows a series of emails between Acton and and a potential job candidate in the two months before WhatsApp’s deal with Facebook was announced. The candidate, whose name was redacted in the public document, identified himself as a senior member of Facebook’s finance team and reached out to pitch himself as a chief financial officer for the startup. Acton agreed to take the meeting and after coordinated meetings with other team members and asked for references. The exchange suggests WhatsApp had plans to build a sustainable business absent a deal. But before any hiring took place, Facebook bought WhatsApp, and it no longer needed its own financial leader.

On cross examination, Acton testifies that the startup added group messaging, video sharing, profile pictures, and many other features prior to the 2014 acquisition. While he and co-founder Jan Koum vehemently resisted making WhatsApp into a social media platform, the FTC seems to be suggesting that it was far from a static product limited solely to text messaging, absent Meta’s ownership.

Acton testifies that the startup had already broken even on the roughly $8 million it raised and had only begun charging its $1 per year subscription in seven countries, meaning there was plenty of room to grow. As its pricing power grew, he theorizes, WhatsApp could have eventually bumped the price to $5 or $10 per year. While the FTC has theorized that WhatsApp likely would have had to run ads eventually to satisfy investors — with or without Meta — Meta says the founders had no interest or need to shift to an ad model without the acquisition.

Acton says the messaging app company had talked with Google about a potential acquisition back in 2011, but the startup decided against it. At one point, Google founder Larry Page had asked to be given the opportunity to bid on the app if they were eventually open to selling, Acton testifies. But WhatsApp never went back to Google to solicit an offer once Meta agreed to buy it for about $19 billion in 2014, he says, adding that Google was not as good of a fit at the time.

Acton reinforces a notion we’ve heard about the WhatsApp founders throughout trial: that they had absolutely no interest in building an ad-supported product or a social media feed. He testifies he wanted to focus on building the communications product and limiting distractions. “We had no ambition to build Facebook-like functionality like a feed,” he testifies. That’s why he wrote this infamous note in the early days of WhatsApp as a reminder of its guiding principles.

Before Meta bought it, WhatsApp was moving toward a model where users would pay $1 per year for the messaging service after a free first year. Though the company was cashflow positive in early 2014, WhatsApp didn’t spend money on marketing in the US, since the wide availability of cheap or free messaging there at the time would have made it a “waste of money,” Acton says.

That’s the message from Meta’s next witness, Catherine Tucker, an MIT management and marketing professor with expertise in digital monetization strategies. Tucker argues it’s important to account for this kind of competition because it’s the crux of how Meta makes money.

Government attorney Mitchell London points out that List’s “natural experiment” about how consumers behaved when India banned TikTok leaves out some potentially important context. He notes that 58 other apps, including popular messaging and social app WeChat, were banned alongside TikTok — meaning there were fewer alternative apps for consumers to turn to. List says TikTok made up the vast majority of usage prior to the app bans. But London also points to a Meta document that says, “In emerging markets, especially India, Facebook often serves a completely different purpose.”

On cross examination, the FTC interrogates List’s finding that Google Chrome is the top app users go to when they’re incentivized to spend less time on Facebook. List says he didn’t focus on the app as much as YouTube and TikTok since “it’s a little like off-device time has an infinite number of things you can do.” The FTC seems to be suggesting that this is exactly the point — and why evaluating Facebook’s relevant competitors based on where users shift their time is an imperfect measure.