In his second day on the stand in a landmark antitrust trial, Mark Zuckerberg, the chief executive of Meta, on Tuesday defended the social media company’s 2012 acquisition of Instagram, describing the transaction as business as usual for a tech company.
Businesses weigh the benefits and costs of developing new products themselves against buying start-ups with products they want to add, he said.
When Instagram was competing with his company’s now-defunct Camera app, “we were doing a build-vs.-buy analysis,” Mr. Zuckerberg said. “I thought that Instagram was better at that, so I thought it was better to buy them.”
Mr. Zuckerberg is the central witness of the antitrust trial, in which the government accuses Meta of violating competition laws by purchasing WhatsApp and Instagram in a “buy or bury” strategy. He spent more than seven hours answering questions on Monday and Tuesday from lawyers in the U.S. District Court for the District of Columbia as they tried to make the case that he had viewed the other apps as rivals he needed to take out.
The case, Federal Trade Commission v. Meta Platforms, poses a consequential threat to Mr. Zuckerberg’s business, which he co-founded as Facebook in his Harvard dorm room in 2004. The F.T.C. has asked Judge James E. Boasberg, who is presiding, to find the Silicon Valley company guilty of illegally maintaining a social media monopoly. Meta bought Instagram for $1 billion and, two years later in 2014, WhatsApp for $19 billion.
If successful, the government is likely to ask the judge to break up Meta by ordering it to sell off the two apps.
Mr. Zuckerberg has previously acknowledged the possibility of a sale. Lawyers for the F.T.C. on Tuesday presented an internal email that he wrote in 2018 warning executives that antitrust concerns may reshape Meta’s business.
“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,” Mr. Zuckerberg wrote.
On Tuesday, he explained: “I just wanted to be mindful that we should have a strategy that is creating the most value for the people we’re trying to serve, taking into account the direction that the politics seemed to be telling you at that time.”
Legal experts cautioned that the F.T.C. faced an uphill climb to win. The government is asking Judge Boasberg to look back more than a decade and find that Meta stayed powerful by quashing competitors through its acquisitions. Regulators approved the Instagram and WhatsApp deals at the time, raising questions about why, experts said.
The lawsuit is part of a broader push by U.S. regulators to rein in the power of the largest tech companies. The F.T.C. has also sued Amazon, accusing it of protecting a monopoly by squeezing sellers on its vast marketplace and favoring its own services.
The Department of Justice won a suit last year accusing Google of maintaining a monopoly in search, and a proceeding to determine remedies for the violations is set for next week. The department has sued Google over its dominance in ad technology as well. Apple was also a target of a suit by the government, which accused it of making it difficult for iPhone and iPad users to leave its ecosystem.
During opening statements in the Meta trial on Monday, the F.T.C. said the company’s purchases of Instagram and WhatsApp had cemented its power, depriving consumers of other social-networking options and edging out competition.
Meta’s lawyers denied the allegations in opening statements, countering that the company faces plenty of competition from TikTok and other social media platforms. Trying to unwind the mergers a decade after their approval would set a dangerous precedent, the lawyers added.
On Tuesday, lawyers for the F.T.C. pressed Mr. Zuckerberg to explain internal communications that preceded the purchases of Instagram and WhatsApp. His notes detailed worries about how Facebook could compete on mobile devices.
Mr. Zuckerberg frequently said during the questioning, which at times became contentious, that he didn’t remember his thought process for certain emails.
The F.T.C.’s lead litigator in the case, Daniel Matheson, pointed to correspondence from 2012 between Mr. Zuckerberg and his top executives in which they traded candid thoughts on employee performance, potential and past acquisitions, and the threat of upstart competitors.
In one email, Mr. Zuckerberg told Sheryl Sandberg, Meta’s chief operating officer at the time, that he could teach her to play Settlers of Catan, a popular board game. He went on to criticize some lieutenants, saying their lagging performance was one reason they needed to buy Instagram for $1 billion.
“A billion dollars is very expensive,” Mr. Zuckerberg said on the stand.
In another email, from 2013, Mr. Zuckerberg told executives to block foreign competitors, including popular Asian messaging apps like Kakao and WeChat, from advertising on Facebook.
“Those companies are trying to build social networks and replace us,” he wrote. “The revenue is immaterial to us compared to any risk.”
On the stand, where he is expected to resume his testimony on Wednesday, Mr. Zuckerberg continually pointed to the business reasons for buying the two young rivals.
“Building a new app is hard,” he said when asked why, in one 2012 email that was presented, he had seemed intent on buying Instagram. “We’ve probably tried building dozens of apps over the history of the company, and the majority of them don’t go anywhere.”
“We could have built an app,” he added. “Whether it succeeded or not is a matter of speculation.”