Mark Zuckerberg Considered Selling Instagram in 2018 Amidst Legal Challenges

In a significant development during the ongoing legal proceedings involving Meta, CEO Mark Zuckerberg revealed that he contemplated selling Instagram in 2018 to preempt potential antitrust actions against his company. This admission came on the second day of the trial concerning the acquisitions of Instagram and WhatsApp, as reported by various sources including Bloomberg.

Zuckerberg indicated that divesting Instagram could have provided Facebook with a stronger foundation as an independent entity. Furthermore, he mentioned that just four years later, he considered a drastic measure of removing all friendships on Facebook, essentially forcing users to rebuild their connections, which he believed would enhance the platform's relevance. Ultimately, both strategies were abandoned.

During his testimony, Zuckerberg disclosed that Facebook had made a $6 billion acquisition offer to Snapchat back in 2013, a figure much higher than the previously acknowledged $3 billion. This revelation aligns with the Federal Trade Commission's (FTC) argument in its current lawsuit against Meta, suggesting that the company's substantial purchases of WhatsApp and Instagram were aimed at stifling competition by eliminating rivals.

Additionally, it was reported that Zuckerberg had proposed a $450 million settlement to the FTC at the end of March in an attempt to circumvent the ongoing litigation. This offer, however, was a fraction of the $30 billion the FTC is seeking, highlighting the stark disparity between the regulatory body's demands and Zuckerberg's proposed resolution. He claimed to have support from then-President Donald Trump, to whom he had contributed $1 million during the latter's inauguration campaign. Nonetheless, the FTC rejected the offer, and even a subsequent increase to $1 billion did not meet the agency's expectations, which included demands for a minimum of $18 billion alongside further stipulations for Meta.

The trial, which is expected to extend at least until July, focuses on the FTC's efforts to dismantle Facebook by arguing that its acquisitions have suppressed competition and eliminated emerging challengers. Zuckerberg and his team counter these claims by asserting that the landscape of social media and competition is far broader than the FTC suggests. This lawsuit was initially filed in December 2020 during Donald Trump's presidency; the first version of the complaint was dismissed by the assigned judge, James Boasberg, who expressed frustration towards the FTC's legal team. However, under President Joe Biden, the FTC has persisted with its case, bolstered by more substantial evidence regarding Facebook's market dominance.

If the FTC successfully convinces the court of the need to reverse the acquisitions, it could have profound consequences for Meta, as Instagram generates about half of the company's advertising revenue, and WhatsApp represents its largest platform in terms of daily active users.