Facebook is facing two different historic antitrust lawsuits from US government officials, which show how fearful Mark Zuckerberg is that his social network will be left behind.
An October 2012 email included in the lawsuit documents read: “This is the biggest threat to our product that I have seen for Facebook in 5 years, we are all terrified.”
This was the time when Facebook became the world’s largest social networking website and bought Instagram for a billion dollars.
The threat mentioned in the email was WhatsApp, which was bought by Mark Zuckerberg’s company for $19 billion in 2014.
Separate lawsuits filed against Facebook by the US Federal Trade Commission (FTC) and the attorneys general of 48 states allege that the company created an illegal monopoly by systematically eliminating its competitors. Is.
Both lawsuits call for Facebook to stop buying companies in the future, but to divest existing apps like Instagram and WhatsApp.
The lawsuits cite numerous emails, memos and messages in which Facebook employees talk about destroying emerging threats to their business.
Facebook, in its response to the lawsuits, has said it will win on the grounds that buying Instagram and WhatsApp made them more user-friendly.
Both cases are based on new and old documents that show how Mark Zuckerberg and his colleagues ruthlessly kept Facebook on top for the past 12 years.
According to the FTC, Facebook’s strategic drive to buy companies began when the company was 4 years old.
In June 2008, when Facebook had dominated the social media market and overtaken others, the FTC quoted Mark Zuckerberg as saying, “It’s better to buy them than to compete.” Skin also gave it real shape.
In 2009, Facebook bought OktaZen (an app that automatically imports users’ phone contacts) and FriendFeed, a Malaysian company that provided content for several social networks, and Facebook acquired other companies. Access was terminated.
The state lawsuit alleges that the agreements were intended to prevent Twitter, a site considered a threat to the company at the time, from using or buying them, with one official saying it was worth buying OctaZine for a few million. holds because it may slow down some rival companies for some time.
Shopping for Instagram
Mark Zuckerberg was told by a Facebook investor in January 2012 that Instagram could be worth $500 million, and he described the price as surprising, even though he had already been eyeing it.
According to the FTC, in February 2011, Mark Zuckerberg told his officials that we need to keep an eye on this app because it could be a threat to us.
It was at a time when Facebook was having trouble getting into smartphones and Mark Zuckerberg was worried that if Instagram moved into photo sharing, it might start copying Facebook’s key features.
In January 2012, he felt that Instagram’s unique features could make it an alternative to us, and at that point he told Chief Financial Officer David Ebersman, ‘What we’re buying is actually time, giving us a year to buy competitors. Or maybe more time to adapt so that no one else can come close to us on that scale’.
When asked if his goal is to disrupt competition, Mark Zuckerberg answered yes.
When the deal went through, Mark Zuckerberg privately expressed his delight, saying that it’s good to buy competing companies.
WhatsApp is the biggest threat
Even before buying Instagram, Facebook had expressed concern about falling behind in another area, private messaging, which Mark Zuckerberg believed was the most important app on anyone’s phone.
The lawsuit states that looking at China’s app WeChat, Facebook’s inner circles were led to believe that it could create gaming, payments and a new kind of social network.
Describing WhatsApp as the most dangerous at the time, Facebook’s ‘terrified’ product management director from 2012 to 2013 joined the list of executives calling the messaging app the company’s biggest competitor. The biggest threat was
According to the FTC, there was also concern within Facebook that WhatsApp could end up in the ‘wrong hands’.
This was the reason that if in 2012 Mark Zuckerberg was ready to give a billion dollars for this app, then this price will reach 5-6 billion dollars in 2013 and in 2014 he managed to buy it for 19 billion dollars.
The FTC quoted one manager’s message as saying, “It’s not worth it. We’ve potentially stopped the only company that could have been the next Facebook on mobile, 10 percent of the company’s market value.” Nothing in front of’.
There is evidence in these cases that suggests Facebook made the decision to buy these apps under the assumption that they were so successful that they could be considered dangerous.
According to the lawsuits, Mark Zuckerberg dismissed the idea that Instagram’s small team and negligible revenue at the time made the acquisition risky for the company, saying the app was on the way to success.
If WhatsApp had not been bought, it could have achieved the same success as Facebook.
The lawsuits will also focus on how Facebook uses access to data to punish its competitors and bring other companies down the road.
For this purpose, rival companies were blocked from connecting to Cove’s Facebook services systems.
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2024-07-04 22:43:20