Meta’s Zuckerberg eyed Instagram spinoff amid antitrust scrutiny, document shows

April 16, 2025 , 10:49 AM

By Jody Godoy and Katie Paul

(April 15, 2025, REUTERS) – Meta META.O CEO Mark Zuckerberg considered spinning off popular photo-sharing app Instagram in 2018 over concerns about the growing risk of antitrust scrutiny, according to a document shown at a trial in Washington on Tuesday.

The document was shown during Zuckerberg’s second day of testimony at the high-stakes trial, in which the U.S. Federal Trade Commission is seeking to unwind Meta’s acquisitions of prized assets Instagram and WhatsApp.

“I wonder if we should consider the extreme step of spinning Instagram out as a separate company,” Zuckerberg said in a memo pushing back on plans to reorganize the social media company and link its apps together more closely.

He said the move was likely to yield “strong business growth” but cautioned that it also could erode the value of flagship app Facebook’s social network, with scant promise that the company would get to keep its full “family of apps” in the end.

Meta ultimately did not act on Zuckerberg’s proposal, instead proceeding with the consolidation plan the following year. But the fact that Zuckerberg even considered the idea is a stunning sign of how seriously he took the threat of precisely the type of antitrust trial proceeding now.

“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 wrote.

“This is one more factor that we should consider since even if we wanted to keep those apps together we may not be able to,” he said.

Zuckerberg also downplayed the impact of a spinoff on the company’s fortunes at the time in his memo, although Meta has argued publicly since then that attempts to break it up would be damaging.

“While most companies resist break ups, the corporate history is that most companies actually perform better after they’ve been split up. The synergies are usually less than people think and the strategy tax is usually greater than people think,” he wrote.

The case, filed during President Donald Trump’s first term, is widely seen as a test of the new Trump administration’s promises to take on Big Tech companies.

‘INSTAGRAM WAS BETTER’

Zuckerberg testified earlier in the day that Meta bought Instagram because it had a “better” camera than the one his company was trying to build under its flagship Facebook brand at the time.

The acknowledgement likewise appeared to support allegations by the FTC that Meta had used a “buy or bury” strategy to snap up potential rivals, keep smaller competitors at bay and maintain an illegal monopoly.

Asked by an attorney for the FTC whether he thought fast-growing Instagram could be destructive to Meta, then known as Facebook, Zuckerberg said he believed Instagram had a better camera than the one his company was building.

“We were doing a build vs. buy analysis” while in the process of building a camera app, Zuckerberg said. “I thought that Instagram was better at that, so I thought it was better to buy them.”

The company argues that his past intentions are irrelevant because the FTC has defined the social media market inaccurately and failed to account for stiff competition Meta has faced from ByteDance’s TikTok, Alphabet’s GOOGL.O YouTube and Apple’s AAPL.O messaging app.

‘BUILDING A NEW APP IS HARD’

Zuckerberg also acknowledged that many of the company’s attempts at building its own apps had failed.

“Building a new app is hard and many more times than not when we have tried to build a new app, it hasn’t gotten a lot of traction,” Zuckerberg told the court.

“We probably tried building dozens of apps over the history of the company and the majority of them don’t go anywhere,” he said.

Zuckerberg’s testimony comes as Meta is defending itself years after the release of damning statements plucked from Facebook’s own documents, like a 2008 email in which he said “it is better to buy than compete.”

The FTC accuses Meta of holding a monopoly on platforms used to share content with friends and family, where its main competitors in the United States are Snap’s Snapchat SNAP.N and MeWe, a tiny privacy-focused social media app launched in 2016.

Platforms where users broadcast content to strangers based on shared interests, such as X, TikTok, YouTube, and Reddit RDDT.N, are not interchangeable, the FTC argues.

(Reporting by Jody Godoy in Washington and Katie Paul in New York; Editing by Alexandra Alper, Mark Porter and Marguerita Choy)

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