Meta saw Tiktok as a “very urgent” threat, Zuckerberg said in an antitrust trial.
Mark Zuckerberg said that Bytedance Ltd.’s Tiktok posed a “very urgent” competitive threat to Meta Platforms Inc. when it first emerged in 2018.
“We observed a dramatic slowdown in growth,” Meta’s chief executive said Wednesday as Tiktok gained popularity. “It was very urgent. This has been a top priority for the company for several years.”
Zuckerberg has spent seven hours over the past two days and was questioned by government lawyers. Government lawyers have pushed him back to the company’s struggle (and then Facebook Inc.) to keep up with the mobile app boom over the past decade. That led to the company’s purchase Instagram WhatsApp began reels video products for Instagram in 2020, supporting Tiktok over 10 years ago.
FTC wants to have Meta sell the app. It is trying to paint Zuckerberg as a clever executive who illegally dominated parts of the social media market by purchasing it rather than competing. In response to Meta’s lawyer, Mark Hansen, he can tell his story without pushback.
“People will share in five years in a new way than what’s going on today,” Zuckerberg said.
Zuckerberg said Meta will compete with a variety of platforms, including Google YouTubeand apple Inc.’s iMessage and Elon Musk’s x,telegram, Microsoft Corp.’s LinkedIn others. The FTC claims that in a narrow market of sharing information with friends and family, Meta competes only with Snap Inc. snapchat.
“Network Effects”
Some of the FTC cases involve the technical concept of “network effects.” In other words, the more user companies such as Meta, the more likely they will retain a dominant position as people rarely switch to services used by a small number of people.
US District Judge James Boasberg, who presides over a non-judgment trial in Washington, has remained largely silent during the questioning, but Zuckerberg’s testimony on Wednesday was inserted to ask whether network effects were still important.
“If you can send content from that platform, how important is it if your friends are on a particular platform? Why is it important when you have friends?” the judge said.
Zuckerberg said that wasn’t the case. “These apps now act primarily as discovery engines,” he said. “People can bring that content to the messaging engine.”
If the FTC wins, the Instagram and WhatsApp spinoffs could cancel long-standing integrations between apps, destroying two of the world’s most popular digital consumer products, and wiping the market value of the meta in the hundreds of billions of dollars. It will also raise serious questions about how the government evaluates and approves transactions.
Large companies
Under questions by Hansen, Zuckerberg countered the FTC’s argument that Meta acquired Instagram to fill its competitors. He said Instagram would not have been able to grow as long as it had it had, if it remained independent. Zuckerberg said that “Instagram is built into a much more vibrant service” as a result of the transaction.
Bringing small amounts of online platforms to more than 1 billion users is unlikely to happen without the support of large companies, he said. “Every company with this level of size is owned by a larger company,” he said. We are quoting Tiktok from Baitedan Ltd. and YouTube from Google as examples.
The first half of the exam was announced in 2013, in which Snap turned down a $6 billion offer from Facebook, and Zuckerberg said the service would grow even further if he joined his company.
By asking a militant question from FTC lawyer Daniel Matheson earlier this week, Zuckerberg tried to return a statement he made in previous internal communications.
Zuckerberg confirmed his Facebook message in a 2013 email blocking ads on messaging apps Kakao and Line. But in this week’s stands, he said “it’s difficult to characterize what their intentions are.”
When asked by Hansen to explain how he assessed the competitive threat posed by Instagram and others at the time of the transaction, he referenced the previous quote. Intel Corp. CEO Andy Grove says, “Only delusions survive.”
Matheson also sought to show that Meta, then known as Facebook Inc., was aware of the risks of antitrust laws several years ago, including the possibility of breaking up.
He displayedEmail from 2018Zuckerberg wrote: “As the appeal for big tech companies grows, there is a small chance that they will be forced to spin out Instagram and WhatsApp in the next five to ten years anyway.”
This story was originally introduced Fortune.com