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In a significant testimony that could influence a major monopoly trial, Instagram co-founder Kevin Systrom accused Mark Zuckerberg of limiting the growth potential of Instagram following its acquisition by Meta. The accusations, supporting the claims of antitrust regulators, are at the center of the trial that may lead to the breakup of Meta.
Systrom, a key witness for the US Federal Trade Commission (FTC), testified in a federal court in Washington, stating that Meta did not provide the necessary resources for Instagram’s growth after acquiring the app in 2012 for $1 billion. This testimony aligns with the FTC’s allegations that Meta attempted to maintain its monopoly, partly by acquiring Instagram and then curbing its growth to avoid a potential decline in Facebook’s network.
The FTC highlighted a confidential email from Zuckerberg in 2018, which suggested that Instagram’s growth was detrimental to Facebook’s expansion, prompting the decision to withdraw various tools previously introduced to aid Instagram’s development. Systrom cited Meta’s insufficient staffing support for Instagram as a contributing factor to his departure from the company in 2018.
During the trial, an email from Systrom, dated 2017, was presented, expressing dissatisfaction with Meta’s allocation of staff to enhance video development efforts. Meta responded to the allegations, emphasizing that historical documents do not change the current competitive landscape and the FTC’s weak case.
During the cross-examination by Meta’s attorney, it was argued that Meta had indeed facilitated Instagram’s growth after its acquisition, when the platform had minimal staff and no revenue. Systrom’s departure, alongside fellow co-founder Mike Krieger in 2018, reportedly followed disagreements over Zuckerberg’s integration strategy for Instagram with Facebook and WhatsApp.
The testimony shed light on previous disputes between Zuckerberg and other co-founders, including those of WhatsApp, over privacy and data protection issues. Meta’s acquisition of WhatsApp for $19 billion in 2014 is also under scrutiny in the FTC’s case.
Zuckerberg, who previously testified, contended that the acquisitions of Instagram and WhatsApp were intended to accelerate their growth. In court, Systrom acknowledged that while Instagram might have continued to grow independently, the company’s first slowdown was observed about a year after joining Facebook.
Meta’s legal team highlighted the additional features launched on Instagram post-acquisition and measures taken by Meta to increase user engagement, such as integrating notifications and advertising support. Systrom conceded that access to Meta’s advertising system expedited Instagram’s monetization process but alluded to potential underlying issues affecting resource allocation to Instagram.
Systrom revealed that strained relations with Zuckerberg might have resulted in the withdrawal of resources from Instagram, emphasizing the emotional weight of choosing between Instagram and Facebook. A 2018 email from Zuckerberg, presented in court, revealed considerations of spinning off Instagram to possibly retain Systrom and address the perceived growth conflict with Facebook.
