Prime Highlights:
- Mark Zuckerberg once contemplated breaking off Instagram to stop it from engulfing Facebook.
- In-house emails point to worries that Instagram’s meteoric rise would harm the experience for users of Facebook.
Key Facts:
- Zuckerberg told employees in an internal 2018 email that Instagram’s growth would result in a “network collapse” for Facebook.
- The U.S. Federal Trade Commission (FTC) is referring to these emails as proof for its antitrust lawsuit against Meta.
- Instagram co-founder Kevin Systrom testified that Meta deliberately constrained Instagram’s resources after it was acquired.
Key Background
Facebook bought Instagram in 2012 for approximately $1 billion, a foray into the world of mobile photo-sharing. The acquisition initially fit into Facebook’s long-term plan. By 2018, though, internal emails showed that Mark Zuckerberg feared Instagram’s growth would cannibalize Facebook users. In one such internal email, Zuckerberg wrote that Instagram’s growth was causing an unprecedented drop in Facebook engagement, a process he called “cannibalization.”
Zuckerberg’s description of the harm done to Facebook led him to think that offloading Instagram might have been an option in order not to lose Facebook’s core base. He added that the growth of Instagram occurred so fast that it became hard to handle both websites without jeopardizing Facebook’s user base. This is at the essence of the latest antitrust complaint filed by the FTC against Meta, where the company argues that the acquisition by Meta of both WhatsApp and Instagram was an anti-competitive action meant to curb any future competition that might happen.
The FTC referenced Zuckerberg’s email communications as evidence in its complaint, alleging Meta used its buyouts to crush competition and dominate the social media market. The Meta response is that its acquisitions helped users over the long term by improving user experience on Instagram and Facebook.
Meta Instagram co-founder Kevin Systrom also provided testimony that Meta specifically worked together with the intention of restricting Instagram’s resources following the acquisition so that Instagram would not engage more than Facebook. Systrom mentioned some examples of the ways in which he claimed Meta suppressed the growth of Instagram, such as constraining video growth, and made it public that they eventually pushed him out of Meta in 2018. They highlight Facebook’s competition against Instagram and are another complaint of Meta for the manner in which it works and acquires companies.
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