Meta defends Instagram, WhatsApp acquisitions as FTC calls final witnesses: Key highlights | Technology News
The high-stakes antitrust trial against Meta continues to unfold at a US district court, where the Federal Trade Commission (FTC) is set to call its final witnesses to the stand this week.
The antitrust watchdog has accused Meta of acquiring potential rival platforms Instagram and WhatsApp in order to establish an illegal “social network monopoly”. As Meta prepares to mount its defence this week, the outcome of the hearing could have sweeping consequences for the social media giant, including a potential divestiture of its two most valuable platforms.
The first week of the hearing saw over ten hours of testimony from Meta CEO Mark Zuckerberg, wherein he argued that the company had made both Instagram and WhatsApp better for users after acquiring them. Sheryl Sandberg, the former chief operating officer (COO) of Meta, also testified that Meta had nurtured Instagram into a ‘star app’.
Here are the key parts of testimony from other witnesses heard so far.
Meta CMO Alex Schultz
Alex Schultz, the chief marketing officer (CMO) at Meta, took the witness stand to testify about the staffing and expertise Meta gave Instagram after its 2012 acquisition, according to a report by The Verge.
Instagram co-founder Kevin Systrom got pretty much “everything he wanted” for the next three to four years post-acquisition, according to Schultz.
In his testimony a few weeks ago, Systrom had suggested that there was tension between his central growth team and Systrom in the mid-2010s. On Monday, May 12, Schultz said that Systrom was not interested in the Meta growth team’s suggestions to grow Instagram.
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“I think Twitter had a less effective growth team than us,” he was quoted as saying. The Meta executive argued that Instagram’s growth rate recovered after it dipped by 14 per cent in 2018. “I didn’t think it had the highest engagement when I got to see the numbers when it was inside,” he said, referring to Instagram’s engagement numbers pre-acquisition.
On the FTC’s allegation that Meta’s network effects and extensive mapping of users’ connections made it difficult for newer players to compete, Schultz said that creating a social graph of users’ friends, likes, and interests was not as meaningful for social apps now as it used to be — thanks to recent advancements in AI.
The FTC also argued that the user growth rate of Instagram and Facebook seemed to be less because they have already added most of the roughly 250 million potential eligible users in the US. In response, Schultz said that Meta’s platforms compete with the likes of YouTube and TikTok for the time spent by users on social media. ““Time is the thing people are all competing for because people are multi-homing, they’re using every app,” he was quoted as saying.
New York University professor Scott Hemphill
Scott Hemphill, an NYU professor and the FTC’s chief economic expert, testified about the definition of the social media market in the antitrust lawsuit and how Meta monopolised it by harming competitors and consumers.
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Since the first day of the trial, Meta has said that users spent more time on Instagram after TikTok was briefly shut down in the US earlier this year. This, in turn, shows that users see Instagram as a viable alternative to TikTok, the company’s attorneys have argued.
When Judge Boasberg asked Hemphill about this argument, the NYU professor said that the TikTok outage is “extremely problematic from the standpoint of trying to understand monopoly power.” How users behaved during a Facebook outage is more useful, he reportedly added.
Hemphill also cited Google Search as an example of how an alternative service may not make for an adequate substitute just because it fulfills what a monopolist offers. Users can do a shopping search on Amazon or a travel search on Expedia, but these are “slivers of what it [Google Search] does,” Hemphill was quoted as saying by The Verge.
