Matheson Walked Zuckerberg Through a Memory Lane to the FTC: Facebook and Telegram, and Mark Hansen at the Kremlin Trial

During the next several hours of questioning, Matheson walked Zuckerberg down a memory lane to when the FTC claimed that Facebook had locked out other companies in the wake of its $1 billion acquisition of the photo sharing service. The agency filed a lawsuit five years ago that is going to trial this week, and it argues that Meta should have to separate from both of its acquisitions.

“The camera was good. The filter was clean. They liked their product. “It was a great experience for people, and they liked it,” he said, pointing to the fact that he was debating about building a photo service. He said he thought it was better to buy them.

On his second day at the witness stand, Mark Hansen tried to illuminate the CEO’s thinking ahead of the Meta purchase for $1 billion, and the take-over of Telegram for $19 billion, by pointing to old internal emails.

“In particular, he will bear down on Zuckerberg emails that express apprehension that an independent Instagram could evolve quickly into a potent social network platform that would threaten Facebook,” Kovacic told NPR.

The founder of Facebook has already testified for over nine hours. He is expected to continue his testimony on Wednesday. The FTC is prodding him to confirm the market theory and understand his motivation for acquiring rivals.

The FTC’s case against Facebook could be shut down by a judge who is not affiliated with a social media platform: The case of Meta

If the judge sides with the government and orders Meta to divest from Instagram and WhatsApp, it could devastate the company’s advertising business. Instagram is estimated to represent half of Meta’s overall advertising revenue, up from just 7% in 2015, according to analytics firm eMarketer.

This isn’t the first time the tech executive has testified under oath. The social media mogul has addressed Congress a number of times, and has apologized to the parents in the audience for any harm that his platforms have done.

The judge in the case probably won’t deny the merits of the buys because he’ll likely be considering them, according to the FTC chair.

Supporters of the FTC’s case against Meta fear Trump could still intervene in the case by instructing the federal agency to settle in the midst of the trial.

The president’s interference in the case is a constant worry for the FTC chair as she advanced the case, she said on CNN.

Shortly after he was sworn in, the Federal Trade Commission’s lead attorney for the case, Daniel Matheson, asked Zuckerberg to reflect back on when Facebook was the underdog.

While Matheson’s line of questioning at times felt monotonous, it seemed at least partly intended to provide historical context for Chief Judge James Boasberg, who admitted during pre-trial that he’d never used a Meta service. (At one point, Boasberg asked the Meta CEO for a crash course on what “native code” meant. Zuckerberg eagerly obliged.)

FTC, Facebook, and MySpace: A Gribov-in-The-Field Theorem for the Fogs of MySpace and Meta

In court, Zuckerberg downplayed the threat Instagram posed to Facebook at the time. “Yeah, of course,” he said in response to Matheson asking if both apps were competing to connect friends with each other. “Was that the main thing that was going on? Not to my recollection.”

During Meta’s opening arguments, the company’s lead lawyer Mark Hansen argued that the FTC’s market definition is artificially narrow by excluding TikTok, iMessage, and other services. He called the case “a grab bag of FTC theories at war with the facts and at war with the law.”

Even if Meta can be proven to have monopoly power in the market, the FTC will still have to show that the company did something to achieve or maintain its dominance.

To hear Meta retell it, the company saw opportunities where it could invest and grow fledgling products into now-massive apps used around the world. The FTC claims that because they were on their own, they wouldn’t have been out of place in Zuckerberg’s early refusal to sell to MySpace.

FTC theorizes that Meta has increased its ad load because it has users that don’t have alternative services. Zuckerberg suggested that Meta at one point considered making a feed of only ads because its users think they’re as good as regular content.

When he was wondering about how to bring some early magic back to Facebook in 2022, Zuckerberg suggested the idea of wiping users’ friends lists to experience the joy of starting from scratch. He considered giving up on the battle against the government and going for it with the app that he is now fighting so much.

Analogues of Analysis Without Prejudice” by CNBC and Silicon Valley Privacy and Antitrust Reporter Susanne Vlasov

is a senior policy reporter at The Verge, covering the intersection of Silicon Valley and Capitol Hill. She spent five years at CNBC covering tech policy, writing about privacy and antitrust.