After years of moving fast and breaking things, governments around the world are waking up to the dangers of uncontrolled tech platforms and starting to think of ways to rein in those platforms. Sometimes, that means data privacy measures like the General Data Protection Regulation (GDPR) or more recent measures passed in the wake of Facebook’s Cambridge Analytica scandal. On the smaller side, it takes the form of specific ad restrictions, transparency measures, or anti-tracking protocols. With such a broad problem, nearly any solution is on the table. It’s still too early to say whether those measures will be focused on Facebook, Google, or the tech industry at large. At the same time, conservative lawmakers are eager to use accusations of bias as a way to influence moderation policy, making the specter of strong regulation all the more controversial. Whatever next steps Congress and the courts decide to take, you can track the latest updates here.
The company has been hammered by legislators and parents for how it sucks users into its services, but Zuckerberg says Meta focuses on creating valuable experiences, rather than making sure users stay engaged for as long as possible.
“I don’t want the team to just say, ‘oh this variant of the algorithm, people spend 20 seconds more in, so we’ll ship this,’” he says.
FTC attorney Daniel Matheson just passed Zuckerberg as a witness. Zuckerberg has been on the stand for roughly eight hours so far between today and yesterday. Now it’s Meta’s lead attorney Mark Hansen’s turn to question the CEO.
But he’s not giving them much to work with. The government wants to show that Meta dominates a distinct market of social apps for connecting with family and friends that only includes Snapchat and MeWe, a crucial element of proving its case.
Zuckerberg says that apps like TikTok might not explicitly market themselves that way, but “they’ve certainly taken steps” to promote friend connections by doing things like prompting users to import contacts.
He seems resistant to the idea that the professional social network is all that different from his own offerings nowadays. The FTC argues that the market Meta dominates is primarily about sharing content with family and friends, which would exclude services like LinkedIn and Nextdoor that market themselves for more specialized functions. According to Zuckerberg, “all of these are quite a bit more competitive” with Meta’s apps.
Zuckerberg revealed this after the FTC attorney prodded him about whether people come to Facebook or Instagram just to look at ads. “You’ve never chosen to offer a feed of just ads,” the FTC’s Daniel Matheson says. “I think we’ve discussed it at one point,” Zuckerberg responds.
While the FTC has tried to frame Meta stuffing its apps with ads as a consumer harm, Zuckerberg contends that the company’s users enjoy them. Over time, he says, people tell the company that the quality of ads “has basically approached the quality of the organic content.”
With the rapid growth of Snapchat Stories, Zuckerberg told his team in 2014: “We need to take this new dynamic seriously -- both as a competitive risk and as a product opportunity to add functionality that many people clearly love and want to use daily.” Because of Stories, he wrote, “Snapchat is now more of a competitor for Instagram and News Feed than it ever was for messaging.”
The Meta CEO says that the way they were able to grow Instagram post-acquisition gave him confidence he could do the same for other apps, like Snapchat. In 2013, he told his team about an offer to buy the app that Snap CEO Evan Spiegel ultimately rejected.
“For what it’s worth, I think if we had bought them, we probably would have accelerated their growth,” Zuckerberg testifies. “But that’s obviously a speculation.”
The FTC is presenting documents from 2013 in which Zuckerberg and another executive, Javier Olivan, discussed messaging app competitors and what they’d need to do to keep up. Olivan wrote that he had spent “sleepless nights” worrying about WhatsApp’s growth and warns that “it might be now or never” to improve Meta’s services, given how fast these guys keep growing / the ambitions they are signaling.
In January 2013, Zuckerberg said he thought his team “should block WeChat, Kakao and Line ads. Those companies are trying to build social networks and replace us. The revenue is immaterial to us compared to any risk.” On the stand, he acknowledges that “we worried about them broadly competing with us” ahead of his purchase of WhatsApp.
Zuckerberg concedes that in a perfect world, he probably would have preferred Facebook’s in-house Instagram competitor to succeed so that he didn’t have to shell out for Instagram.
“$1 billion is very expensive,” he says.
We got a brief glance into some more casual conversation between Zuckerberg and his then-COO Sheryl Sandberg. “I want to learn settlers of catan too so we can play,” Sandberg messaged her boss in November 2012. “I can definitely teach you Settlers of Catan,” Zuckerberg replied. “It’s very easy to learn.”
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.
On the stand, Zuckerberg says that when you buy a company, you’re obviously taking a competitor off the market, but he thinks Meta maximized Instagram’s value.
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.
[ftc.gov]
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:
“By not killing their products we prevent everyone from hating us and we make sure we don’t immediately create a hole in the market for someone else to fill but all future development would go towards our core products.”
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.
He’s also dismissive of the idea that Meta users pay for the services by consuming ads, saying they can just scroll past them.
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.
The FTC will present evidence, such as emails from CEO Mark Zuckerberg, the apps’ founders, and investors, allegedly showing that Instagram and WhatsApp would have grown without Facebook’s help, and that the company’s motive was to take potential rivals out of the market.
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.
We’ll keep you updated with the most notable news throughout the day.
European Commission president Ursula von der Leyen told the Financial Times that the bloc’s laws regulating Big Tech, including the DMA and DSA, are “untouchable” in trade negotiations with the US. They occasionally generate substantial fines on Silicon Valley companies.
What’s not off the table? Retaliatory measures like a new digital advertising tax targeting tech revenue at the source — in contrast to the UK, which already has a similar tax it’s considering watering down.
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.
Rohit Chopra, Trump’s fired Wall Street watchdog, on the future of financial regulation.
The bloc isn’t walking back its landmark AI Act, but is hoping to bolster regional AI developments by making its regulatory environment less cumbersome to navigate. Plans announced by EU tech policy leader Henna Virkkunen include developing new guidance documents, standards, and a code of practice, alongside opening an “AI Service Desk” to guide businesses through compliance requirements.
The two companies are being probed over compliance with the bloc’s Digital Markets Act and are expected to face modest penalties for violations, taking the “geopolitical climate” into consideration. EU antitrust chief Teresa Ribera previously said she would issue her ruling in March but now says that “decisions could be adopted in the coming weeks” as the EU focuses on tariff negotiations with the US.
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.
...it is essential that workers are able to discuss these impacts, participate in the deliberations, and, if they choose, bargain collectively around the implementation of any eventual remedy.
[alphabetworkersunion.org]
