• By Isaac Krampah
  • 18 January, 2025
  • Technology

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

WASHINGTON, April 15 (Reuters) - Meta (META.O), opens new tab 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 the memo. At the time, the company was mulling plans to reorganize the social media company and link its apps together more closely. Zuckerberg pushed back in the memo, saying consolidation was likely to yield "strong business growth" but cautioning 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 spin off Instagram, instead proceeding with the plan to integrate its apps 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.

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"Meta's decision to integrate its apps rather than spin off Instagram highlights the complexities of navigating antitrust concerns while pursuing business growth. This case serves as a pivotal moment in understanding the balance between innovation and regulatory compliance in the tech industry."

The trial has drawn significant attention as it could set a precedent for how regulators address antitrust concerns in the tech industry. Meta's defense argues that its acquisitions have fostered innovation and benefited consumers, while the FTC contends that the company has stifled competition by consolidating its market power.

As the trial unfolds, industry experts are closely watching the outcome, which could have far-reaching implications for the future of tech mergers and acquisitions. The case underscores the ongoing tension between fostering innovation and ensuring fair competition in the rapidly evolving digital landscape.