FTC Trial Reveals Zuckerberg Considered Instagram Spinoff Amid Antitrust Concerns

According to a document presented during his second day of testimony in the ongoing Meta vs FTC antitrust trial, Meta CEO Mark Zuckerberg previously considered separating Instagram from Meta's portfolio. The memo, dated 2018, reveals that Zuckerberg considered the move due to growing concerns that US regulators might force the company to split.

"I wonder if we should consider the extreme step of spinning out Instagram as a separate company," Zuckerberg wrote at the time, while Meta, then known as Facebook, was looking for ways to better integrate its family of apps.  While he saw potential for business growth through consolidation, he cautioned that doing so could reduce Facebook's value and would not guarantee that Meta could retain all of its apps in the long run. Ultimately, Meta decided against spinning off Instagram and instead pursued its plan to unify its platforms. However, the document has resurfaced as a key piece of evidence in the current trial, in which the Federal Trade Commission (FTC) seeks to break up Meta and reverse its acquisitions of Instagram and WhatsApp.

According to reports, Zuckerberg's memo acknowledged the growing political pressure on Big Tech, especially in the event of a change in US leadership. "As calls to break up the big tech companies grow, there is a non-trivial chance that we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years anyway," he cautioned, pointing to the potential behavior of "the next Democratic president."

This court battle occurs years after the FTC officially filed its lawsuit in 2020, during President Trump's administration. Since then, Meta has publicly argued that its acquisitions of Instagram and WhatsApp improved those platforms and that separating them would harm innovation and users. However, in 2018, Zuckerberg appeared more open to the idea of a breakup, stating, "Most companies actually perform better after they've been split up."

This court battle occurs years after the FTC officially filed its lawsuit in 2020, during President Trump's administration. Since then, Meta has publicly argued that its acquisitions of Instagram and WhatsApp improved those platforms and that separating them would harm innovation and users. However, in 2018, Zuckerberg appeared more open to the idea of a breakup, stating, "Most companies actually perform better after they've been split up."

Zuckerberg's recent testimony also included a candid admission that Meta bought Instagram because it had a better camera feature than Facebook was developing internally at the time.  "We were doing a build vs. buy analysis," he informed the court. "I thought that Instagram was better at that, so I thought it was better to buy them." This closely aligns with the FTC's accusation that Meta used a "buy or bury" strategy to suppress rising competition.

During the trial, FTC lawyers highlighted Zuckerberg's previous remark that "it is better to buy than compete" — a statement that has become symbolic of the government's broader antitrust argument.

Earlier this week, it was revealed that Zuckerberg attempted to reach a settlement to avoid the trial. In March, he reportedly offered the FTC $450 million, which was later increased to $1 billion. However, this fell short of the FTC's alleged demand of $30 billion, or at least $18 billion plus a formal consent decree. Andrew Ferguson, the commission's chairman, declined the offer, and the case went to trial this week.

Zuckerberg was called to the stand on Monday. He is expected to return later this week, alongside other high-profile witnesses such as former COO Sheryl Sandberg and Instagram co-founder Kevin Systrom.