The recent Meta antitrust trial has unveiled significant insights into how the social media giant, initially known as Facebook, perceived and responded to the competitive threat from Instagram during the early days of the photo-sharing app.

Allegations and Implications

The U.S. Federal Trade Commission (FTC) is alleging that Meta has breached competition laws by acquiring Instagram and WhatsApp to suppress potential threats to its dominance. Should the FTC successfully argue its case, Meta may be compelled to divest these platforms, fundamentally altering its business structure.

Internal Concerns Over Instagram’s Growth

Documents presented by the FTC during the trial include internal emails that highlight concerns among Facebook executives about Instagram’s escalating popularity. The correspondence reveals that Facebook leadership was not only aware of Instagram’s potential threat but was also considering various strategies in response:

• Mark Zuckerberg expressed concern over Instagram’s rapid growth, noting, “Instagram seems like it’s growing quickly. In 4 months they’re up to 2m users and 30k daily photo uploads. That’s a lot. We need to track this closely.” — February 2011
• Zuckerberg later remarked, “If Instagram continues to kick ass on mobile, or if Google buys them, then…they could easily add pieces of their service that copy what we’re doing now” — September 2011.
• Chris Cox, then chief product officer, stated that the team was concentrating on mobile photo applications due to the growth of Instagram, indicating, “Like Beluga, watching these guys explode validates our strategy of de-cluttering our mobile experience…” — February 2011.
• Zuckerberg added, “One concerning trend is that a huge number of people are using Instagram every day… this creates a huge hole for us.” — February 2012.

Acquisition Considerations and Strategic Responses

In light of Instagram’s growth, Facebook executives contemplated an acquisition strategy designed not only to neutralize the competitor but also to potentially stifle its ongoing development:

• Zuckerberg mused, “I wonder if we should consider buying Instagram, even if it costs ~500M.” — February 2012.
• He further acknowledged, “I think it’s quite possible that our initial thesis was wrong and theirs is right… we might want to consider paying a lot of money for this.” — February 2012.
• Samuel W. Lessin, former VP of Product, proposed acquiring multiple innovative platforms, expressing that it might allow Facebook to temporarily integrate their dynamics before competitors could catch up. — February 2012.
• In a plan to maintain the status quo, Zuckerberg suggested, “I think what we’d do is keep their product running and just not add more features to it, and focus future development on our products.” — February 2012.

Ultimately, these exchanges reflect a broader tactic within Meta to either assimilate emerging competitors or diminish their market share through strategic acquisitions.