Zuckerberg in court: “We have to buy them back”, and the threat from TikTok

During a three-day sworn testimony in court in the middle of the week, the billionaire tech conglomerate’s founder repeatedly told U.S. Federal Court in Washington that TikTok, the video platform owned by China-based ByteDance, had grown into a formidable competitor.

The purpose behind the praise for Zuck’s rival, is to refute the allegations by the Federal Trade Commission (FTC), that Meta is maintaining an illegal monopoly status, violating US antitrust laws. These allegations, if proven, could have far-reaching consequences for Zuckerberg’s business than any commercial threat the company faces.

If it loses the lawsuit, Meta could be forced by a court and the U.S. government to spin off the $1.5 trillion conglomerate, as well as possibly divest its hugely popular apps, Instagram and WhatsApp. This is a consequence that Zuckerberg once declared that he would “fight to the end” in court. Conversely, if it wins the lawsuit, the company will win a decisive victory against regulators, who have long aimed to control the power of big tech companies. Most recently, the FTC also sued technology and e-commerce corporation Amazon.

The lawsuit comes after Zuckerberg was unable to negotiate with the court to drop the proceedings in the first place. According to a source, the FTC has asked Meta to pay $30 billion in compensation as a potential solution. But Meta offered a “price” to settle with the FTC of $450 million, then increased to $1 billion after the regulator set a floor of $18 billion. Unable to find a common voice, the parties decided to take each other to court.

At the center of the lawsuit, brought to court by the FTC, is the allegation that Meta used a “systematic strategy” to completely eliminate competitors, including the acquisitions of Instagram and WhatsApp in 2012 and 2014 for $1 billion and $19 billion, respectively.

FTC lawyers over the past week presented evidence that Zuckerberg viewed emerging apps as threats, including a series of emails that made Zuck uncomfortable. In 2012, Zuckerberg agreed with the suggestion that the acquisition of Instagram could help “neutralize a competitor” and also said that he wanted Meta to “use the merger process to build a competitive hedge around us in the mobile app and online advertising market.”

However, such tactics can only be considered a violation of the law, if the FTC can prove that Meta is maintaining a monopoly, an argument that some antitrust experts say will be more difficult to prove. This is also the point that Zuckerberg and former Meta CEO, Sheryl Sandberg, focused on during their court questioning. Both emphasize TikTok’s explosive growth to serve more than 1 billion users globally.

“What they’ve said and thought may not be pretty, but it doesn’t have much prove, if any, value in terms of whether Meta maintains its current monopoly status,” said Paul Swanson, head of antitrust and competition at law firm Holland & Hart. “Zuckerberg and Sandberg have done a good job of explaining the current reality, which is that they have pointed out that TikTok and Meta are competing with each other and are just two almost the only options in most users’ minds.”

In antitrust lawsuits, the FTC must also prove that there is harm caused to consumers, usually a monopoly company that increases costs in exchange for the product. But with Meta offering the service for free, the agency argues that consumers have suffered a degraded experience, due to the dominance of the platform, ad-flooded listings, and poor security.

The main challenge for the FTC will be convincing Judge James Boasberg, who is presiding over the trial, that Meta has dominated, in part through acquisitions and mergers, in the “personal social network” market, which focuses on connecting friends and family, with services that do not include TikTok or Google’s YouTube.

A source said Meta’s low offer to settle shows how weak the FTC’s legal experts are in terms of the point.

“We didn’t hesitate to explain the absurdity, when the FTC filed a lawsuit, and then they had to try to prove that what every 17-year-old in the U.S. knew was absurd, which was that Instagram didn’t compete with TikTok. We are ready to win the trial,” Meta spokesperson Dani Lever said in a statement.

However, some experts suggest that Judge Boasberg, who has been relatively quiet throughout the days of this midweek hearing, may be more open to the FTC’s arguments.

“The court is clearly considering the possibility of a personal social media marketplace,” said Kenneth Dintzer, partner at the antitrust and competition group at Crowell & Moring. He cited a filing from 2024 in which Judge Boasberg said the FTC had “met the requirement to prove that other applications are not a reasonable alternative” to sharing friends and family.

Zuckerberg rejected this view in court, pointing to the rush to develop and develop the Reels app, which shares short videos in vertical format to watch on phones, in response to the rise of TikTok. He said that TikTok’s service “has probably become the biggest competitive threat to Instagram and Facebook in recent years.”

Advertise

The head of Meta Group also argued that WhatsApp and Instagram were acquired to drive growth, pointing to a significant increase in the number of users after those deals.

The FTC responded with an email from 2013 in which Zuckerberg said that before the WhatsApp deal, “our biggest competitive threat was for a company to build a messaging app to communicate with a small group of people, and then turn it into a broader social network.”

Zuckerberg said in a 2012 email: “Messenger can’t beat WhatsApp, Instagram is growing much faster than our app, so we have to buy it for $1 billion… It’s not about eliminating competitors.”

“What’s disturbing about Mark’s testimony in court is that he’s trying to refute the claims he made a decade ago when these acquisitions were being seriously considered,” said Lee Hepner, senior legal counsel for the nonprofit American Economic Liberties Project.

Perhaps the most notable piece of evidence was a 2018 Zuckerberg email in which he considered splitting Instagram, citing exactly the kind of threat from antitrust enforcement he faces today. As “efforts to spin up big tech companies increase,” he wrote, “there’s a good chance that we’ll be forced to spin off Instagram and possibly WhatsApp in the next five to 10 years.”