Proceedings against Meta: Mark Zuckerberg wanted to sell Instagram again in 2018
Day two of the Meta trial revolved around money: the offer for Snapchat was higher than announced earlier, and the FTC also received an offer in the billions.
(Image: Algi Febri Sugita/Shutterstock.com)
In 2018, Meta CEO Mark Zuckerberg considered selling off Instagram to avoid a possible split-up of his company. The US billionaire admitted this in court on the second day of the legal proceedings surrounding the takeover of the photo platform and messenger WhatsApp, reports Bloomberg and others. The spin-off was also intended to help Facebook stand on its own two feet. It was only on Monday that he explained that four years later he had considered removing all friendships on Facebook so that all users would have to rebuild their contacts. This should also have increased the relevance of the service. Both were rejected.
Money as a solution to all difficulties
In the witness stand on Tuesday, Zuckerberg also revealed that Facebook offered its competitor Snapchat six billion US dollars for a takeover in 2013, according to dpa. The rejected offer for the then two-year-old application had become public, but only three billion US dollars had been mentioned publicly. The US trade regulator, the FTC, initiated the current legal proceedings against the Facebook parent company with the argument that Meta had eliminated competitors and hindered competition with its multi-billion dollar acquisitions of WhatsApp and Instagram. The billion-euro offer for Snapchat seems to fit this line of argument.
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On Tuesday, it also became known that Zuckerberg offered the FTC 450 million US dollars at the end of March to prevent the lawsuit from going ahead, according to the Wall Street Journal. However, this was only a fraction of the 30 billion US dollars that the authority had demanded, and much less than Meta paid for WhatsApp and Instagram. According to the report, Zuckerberg believed he had the support of US President Donald Trump, for whose inauguration he donated one million US dollars. The head of the FTC rejected this, and even increasing the offer to one billion US dollars did nothing to change this. He had demanded at least 18 billion US dollars and further conditions for Meta.
Mammoth trial has only just begun
In court, the FTC is now trying to achieve a split-up of Facebook, Instagram, and WhatsApp. With the billion-dollar takeovers, he has suppressed competition and eliminated up-and-coming competitors. Zuckerberg and his competitor deny this and claim that the market for social networks, and therefore the competition, is much larger than the FTC claims. The hearings before a court in Washington, D.C. are expected to continue until at least July, but it is assumed that the losing side will then appeal. To kick things off, Mark Zuckerberg had to testify on two consecutive days.
The lawsuit was filed in December 2020, during Donald Trump's first term in office. This first version was rejected by the judge in charge, James Boasberg, with humiliating words for the FTC lawyers, but the authority stuck to the plan under Joe Biden and came back with many more figures. In doing so, the FTC pointed to Facebook's enormous market share. If the authority can actually convince the court that the takeovers need to be reversed, this would have massive consequences for Meta. For example, Meta generates around half of its advertising revenue on Instagram, while WhatsApp is the group's largest application in terms of daily active users.
(mho)
