Mark Zuckerberg’s past intentions to spin off Instagram in anticipation of an antitrust suit have come back to haunt him, as his testimony bolsters allegations that Meta used a ‘buy or bury’ strategy to maintain its dominance in the social media market.
In 2018, Mark Zuckerberg considered spinning off Instagram in anticipation of a potential antitrust suit. This move would have been a response to the growing scrutiny over Meta‘s dominance in the social media market.
Mark Zuckerberg is a American technology entrepreneur, best known as the founder, chairman and CEO of Meta (formerly Facebook).
Born on May 14, 1984, in 'White Plains' , he developed an interest in computer programming at a young age.
Zuckerberg attended 'Phillips Exeter Academy' before enrolling at Harvard University , where he created a precursor to Facebook called 'Facemash.' He dropped out of college to focus on Facebook, which launched in 2004 and quickly gained popularity.
In 2012, Zuckerberg became the youngest billionaire in history after Facebook's IPO.
Today, Meta is one of the world's largest technology companies, with over 3 billion monthly active users.
While most companies resist break-ups, the corporate history is that most companies actually perform better after they’ve been split up, according to an email written by Zuckerberg at the time. He also acknowledged there was a non-trivial chance his company would be forced to spin Instagram and WhatsApp out anyway.
The ‘Buy or Bury’ Strategy
Zuckerberg’s testimony appears to bolster allegations that Meta used a “buy or bury” strategy to snap up potential rivals, keep smaller competitors at bay, and maintain an illegal monopoly. The FTC argues that by acquiring prized assets like Instagram and WhatsApp, Meta has reduced competition in the social media market.
Meta buy and meta bury are terms used to describe online reputation management strategies.
Meta buy involves purchasing positive reviews, ratings, or mentions on social media platforms or review websites to improve a company's online image.
In contrast, 'meta bury' involves suppressing negative content by manipulating search engine results pages (SERPs) or hiding unfavorable reviews.
Both practices can be considered unethical and are often against platform policies.
In his email, Zuckerberg said he bought Instagram because it had a ‘better’ camera than the one Facebook was trying to build for its flagship app at the time. He described Instagram as a “rapidly growing, threatening network”. This acknowledgement seems to support the FTC’s claims that Meta used this strategy to maintain its dominance.
In April 2012, Facebook acquired Instagram for $1 billion. The acquisition was announced on April 9, 2012, and the deal was completed later that year. At the time of the acquisition, Instagram had around 30 million users. Since then, Instagram has grown to over 1 billion active users, making it one of the most popular social media platforms in the world. The acquisition has enabled Facebook to expand its reach into the visual storytelling market and improve user engagement on both platforms.
Meta‘s Defense
However, Meta argues that Zuckerberg’s past intentions are irrelevant because the FTC has defined the social media market inaccurately and failed to account for stiff competition from other platforms like TikTok, YouTube, and Apple’s messaging app. The company claims that its acquisitions have actually increased competition in certain areas.
The FTC accuses Meta of holding a monopoly on platforms used to share content with friends and family, where its main competitors in the United States are Snap’s Snapchat and MeWe, a tiny privacy-focused social media app launched in 2016. Platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube, and Reddit, are not interchangeable, according to the FTC.
The Testimony Continues
Zuckerberg also acknowledged that many of Meta’s attempts at building its own apps had failed. “Building a new app is hard, and many more times than not, when we have tried to build a new app, it hasn’t gotten a lot of traction,” he told the court.
As the trial continues, Zuckerberg’s testimony will likely be closely examined by both sides. The outcome of this high-stakes case could set a precedent for how antitrust laws are applied to big tech companies in the United States.
