Did Meta’s Mark Zuckerberg Consider Spinning Off Instagram Fearing Antitrust Lawsuit?
A document backing this claim was presented in the FTC vs. Facebook (now Meta Platforms) trial in Washington, US.
Even as the FTC vs. Facebook (now Meta Platforms) trial—a high-stakes antitrust case in which the Federal Trade Commission is suing the social network company with the aim of forcing it to divest ownership of Instagram and WhatsApp—goes on, there are indications that Meta CEO Mark Zuckerberg feared this would happen and considered an Instagram spinoff some years back.
Zuckerberg reportedly contemplated spinning off the well-known photo-sharing service Instagram in 2018 due to worries about the increasing likelihood of antitrust scrutiny. A document backing this claim was presented in the trial in Washington, US.
Back in 2018, Facebook was considering restructuring its social media platform and weave its different apps more closely. However, in a memo dated the same year, Zuckerberg had stated, “I wonder if we should consider the extreme step of spinning Instagram out as a separate company.”
“As calls to break up the big tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years anyway,” Zuckerberg stated at the time, adding that the “next Democratic president” might act to dismantle big tech companies. “This is one more factor that we should consider since even if we wanted to keep those apps together we may not be able to,” he wrote.
Zuckerberg even wrote, “While most companies resist break ups, the corporate history is that most companies actually perform better after they’ve been split up. The synergies are usually less than people think and the strategy tax is usually greater than people think.”
Instagram was not spun out by Facebook in the end. Instead, the next year, the company went ahead with closely integrating its apps. However, that Zuckerberg contemplated the Instagram spinoff indicates he took the danger of the very kind of antitrust trial proceeding that is currently taking place very seriously.
In 2020, during the first term of President Donald Trump, the FTC filed a lawsuit against the social networking company. In the high-stakes suit, the FTC is seeking to break up its acquisitions of Instagram and WhatsApp, citing unfair market dominance.
Facebook has been sued by the FTC on the grounds that the company has engaged in years of anticompetitive behaviour to unlawfully maintain its personal social networking monopoly. According to the complaint, Facebook has taken a methodical approach to removing competitors from the market, including the 2012 purchase of Instagram, the 2014 purchase of WhatsApp, and the imposition of anticompetitive rules on software developers.
The case is also being built around documents and statements, including one in 2008 from Zuckerberg himself, which has him saying, “It is better to buy than compete.”
