More from FTC v. Meta: the antitrust battle over Instagram and WhatsApp

That’s how Sandberg remembers the discussions leading up to the acquisition. She also acknowledges that Facebook eventually ended its own photos app project after acquiring Instagram.

In a 2011 email, Sandberg told colleagues that Google’s social network meant that “for the first time, we have real competition and consumers have real choice.” She wrote that it would mean “will have to be better to win, our margins may go down over time, we will no longer be able to make as many mistakes and hold onto our core users.” Sandberg testifies she was concerned because Google “created almost an exact replica” of Facebook.

She’s the second witness in the case, and will likely be here for several hours.

The CEO spent around 13 hours testifying over the past three days and he’s finally finished. We heard about his wild ideas for Meta throughout the years, as well as how he views the social media market, and his mindset leading up to his consequential acquisitions of Instagram and WhatsApp, the central focus of the case.

The CEO testifies that it was reasonable for him to take a more assertive role in scaling advertising on Instagram several years post-acquisition. Early on, he says, Instagram co-founder Kevin Systrom “wanted to personally approve every ad that went on Instagram himself.” And while Zuckerberg was initially “happy to oblige,” he says it later made sense to make the app bear more responsibility for generating revenue.

That’s what Zuckerberg tells the FTC attorney who’s questioning him now. Zuckerberg says he didn’t want to deal with the complexity of “any connection that they had to China.” Musical.ly went on to be acquired by China-based ByteDance, was rebranded to TikTok, and grew into a major Meta competitor, he says.

Mark Zuckerberg ends this chunk of his testimony by discussing where he sees the tech industry headed. He sees the rise of “increasingly immersive content” beyond video and says, “we’re just about due for this next major transition” to smart glasses that blend “the physical and digital world together.” The goal of Meta’s lead attorney here is clearly to paint the company, and Zuckerberg specifically, as an innovator. Judge Boasberg seems engaged.

A smile flashed across his face when Meta’s lead attorney, Mark Hansen, asked if he was “happy” with the $19 billion he paid for WhatsApp in 2014. Hansen showed the courtroom a deck prepared for Meta’s board around the time of the acquisition, which projected that WhatsApp could reach 2 billion users by 2024. The app has nearly 3 billion users now, Zuckerberg testifies. He says monetization is early but expects AI to accelerate the company’s business of charging brands to interact with their customers via WhatsApp.

One of WhatsApp’s founders used Craigslist as an example of his ambitions for the messaging service, Zuckerberg testifies, calling the site a “lifestyle company.” And rather than buying WhatsApp to prevent its growth, Zuckerberg says he had to convince its founders to add social features post-acquisition. This cuts against the FTC’s theory that WhatsApp might have grown to challenge Meta’s dominance had it remained independent or under different ownership.

Zuckerberg considered that WhatsApp could pivot its messaging platform into a “formidable competitor” to Facebook until he got to know its founders. “It became completely clear” they would never add the kind of features necessary to do that, he testifies, because they actually “looked down” on such things. “It’s hard to really express the kind of disdain that they had” for what other messaging apps were doing at the time, he says.

But he points out that the largest platforms today have had the backing of larger companies with massive infrastructure, like Google’s YouTube and ByteDance’s TikTok. “Could I say it would have been impossible for them to do it without us? Obviously not. I mean, we did it,” he says. “But does it seem like it would have been likely?” Definitely not, he says.

Instagram’s growth was never preordained, Zuckerberg says, and the app benefited from Meta’s investment to get to the massive reach it has today. At the time of the deal in 2012, Zuckerberg hoped to grow Instagram from 10 million to 100 million users. It reached a billion users by 2018. Had Meta not bought Instagram, Zuckerberg says, “it’s very hard to know” how things would have turned out. That’s a key challenge for the FTC to address.

The CEO is challenging one of the core arguments of the FTC’s case: Meta’s alleged intent to grow its monopoly power by taking out rivals. “Was the intent to stop offering or stop making Instagram good? Absolutely not,” he testifies.

This old Andy Grove quote is how Zuckerberg describes his mindset toward competition. He says it has been interesting to look back on all the things he was worried about that never materialized the way he expected. One example is Dropbox, which he saw as an “upstream” feature that could eventually become competitive based on its photo storage offerings. “I was focused on things that ended up being so different,” he says.

Zuckerberg is talking about how quickly platforms can go viral. He mentions ChatGPT’s recent image generation upgrade and that “I think they’ve added hundreds of millions of people to their service” as a result. Maybe he read our scoop from yesterday that OpenAI is now working on its own social network.

Zuckerberg says network effects — where more users on a platform makes it better — are not always a good thing, even though the FTC says they’ve grown Meta’s power. He’s previously worried about this so much he’s considered resetting users’ Facebook friends. After accumulating friends over time, users might “wake up one day five years later” and realize they’re following people they no longer care about, he says. But AI recommendations have helped solve for this.

We’ve seen a lot of old emails over the past couple of days where Zuckerberg has expressed frustration and a sense of urgency to catch up with rivals that seem to be on Meta’s heels. He’s spinning these documents as a function of his own competitive spirit. “You can bet that I’m not going to rest until we do quite a bit better than where we’re at now,” he testifies about today’s competition with TikTok.

The Meta CEO is back on the witness stand for the third day of trial. His lead lawyer for the case, Mark Hansen, kicks things off by asking about the impact of TikTok. “We observed that our growth slowed down dramatically” with TikTok’s rise, Zuckerberg says.

We’re getting started with day three of Meta’s antitrust trial with some controversy. A Snap attorney complains to Judge Boasberg that Meta released slides with inadvertently flawed redactions. He also accuses Meta’s lead attorney of openly referencing Snap’s competitive assessments that should have been private.

The Wall Street Journal reports that Mark Zuckerberg called FTC chair Andrew Ferguson and initially offered $450 million before upping the offer to settle to $1 billion. Ferguson apparently wouldn’t initially settle for “anything less than $18 billion and a consent decree” before the FTC upped its counter to $30 billion, per the report. The Journal also notes that President Trump “at various points appeared more open to striking a deal ” and asked “questions about how a settlement would work.”

He was on the stand for roughly 6 hours. The day focused mostly on how Instagram and WhatsApp fared after they were acquired, followed by Zuckerberg teaching his version of Social Media 101 to the court in the afternoon. We got the spicy memo from 2018 in which he suggested spinning off Instagram, but otherwise, there weren’t any big bombshells today.

In an echo of an infamous exchange from one of Zuckerberg’s earlier visits to Washington, Judge James Boasberg asks the CEO to clarify how iMessage and WhatsApp make money. Zuckerberg explains that Meta sells ads that send people to chat with businesses on WhatsApp. He also tells the judge that he thinks Apple is incentivized to keep iMessage exclusive to iOS so that its users don’t want to switch from iPhones to Android.

When asked by Meta’s lead lawyer, Mark Hansen, Zuckerberg says he doesn’t know what MeWe is and “hadn’t heard of it” prior to this case. Aside from Snapchat, MeWe is the other app the government says is in the same “personal social networking services” market that Meta allegedly monopolizes.