Kevin Systrom, co-founder of Instagram, testified in a Washington antitrust trial that his photo-sharing application could have thrived independently without being acquired by Meta Platforms Inc. He expressed skepticism regarding Chief Executive Officer Mark Zuckerberg’s support for Instagram, indicating that Zuckerberg eventually perceived the platform’s rapid growth as a “threat” and restricted its resources.
These assertions may strengthen the U.S. government’s case against Meta, as the Federal Trade Commission (FTC) aims to reverse the 2012 acquisition of Instagram, which has grown to nearly three billion users globally and is expected to account for about half of Meta’s U.S. advertising revenue this year.
During his testimony, Systrom recounted the impressive rate of user growth that Instagram experienced prior to Zuckerberg’s acquisition offer. “The users, they just kept coming,” he said while responding to questions from FTC attorney Bob Zuver. A chart presented by the government illustrated that Instagram’s registered users surged 13-fold in 2011, the year preceding the acquisition.
Systrom asserted that Instagram had the potential to launch significant features such as video support and private messaging, even if it had remained independent. He highlighted that the company relied on Amazon Web Services for its operational needs and could have effectively managed spam and harmful content as a standalone entity. “We would have been able to scale our problematic content screening fairly well,” Systrom noted, emphasizing the feasibility of such efforts.
While acknowledging the uncertainty of success in the startup environment, he stated, “The probability of us failing was low, but it could have failed.” Systrom, who continued to work with Instagram after the acquisition, conveyed that he perceived Zuckerberg’s regard for the app fluctuated, evolving into a sense of rivalry toward Facebook. He reported that Instagram often lacked the resources he sought, such as personnel for critical projects focusing on video content and data privacy initiatives, particularly following the Cambridge Analytica privacy scandal.
“I thought that that was not appropriate given the scale of Instagram,” Systrom added, referring to the limited support provided to a platform of its size.
Exhibits presented by FTC attorneys included emails from Systrom expressing frustration over Meta’s investment strategies regarding Instagram. In one correspondence with former Chief Technology Officer Mike Schroepfer, he remarked that multiple areas were “starving” for investment. In another 2017 message to Instagram’s leadership, he lamented that Instagram received no additional staff despite a widespread push to enhance video capabilities.
“We were given zero of 300 incremental video heads, which is an unacceptable and offensive outcome,” Systrom wrote in his email.
During his testimony, Systrom recognized that competition for resources and staff is common across teams, yet he felt particularly slighted by the lack of support for Instagram, which he noted was crucial to Meta’s revenue growth. “I was working very hard for the company to make this a success and not getting resources back,” he remarked, contrasting his efforts with the inadequate resources allocated to the app.
As the court proceedings continued, Systrom affirmed that the resources from Meta played a significant role in Instagram’s success. “Yes, they gave us many resources that allowed us to thrive,” he stated.
The FTC maintains that by acquiring Instagram in 2012 and WhatsApp in 2014, Meta formed an unlawful monopoly in social networking, urging U.S. District Judge James Boasberg to annul these acquisitions. After agreeing to sell Instagram for $1 billion, Systrom remained with the company until 2018.
The government aims to establish that Instagram was an emerging competitor poised to challenge Meta’s dominance had it remained independent. In the trial’s initial week, the FTC presented numerous internal emails from Zuckerberg and other executives expressing anxiety over Instagram’s rapid ascent and superior photo-sharing capabilities. Furthermore, it seeks to demonstrate that Meta’s acquisition harmed users by intensifying advertisements and reducing safety and security measures.
Meta contends that Instagram’s substantial success follows the support it received post-acquisition. Attorneys for the company emphasized the various ways in which Meta contributed to Instagram’s growth, including hiring personnel, enhancing its advertising system, and leveraging Facebook for promotion. Instagram has ballooned from approximately 30 million users at the time of acquisition to over 2.8 billion monthly users now, according to Meta’s legal representatives.
Meta General Counsel Jennifer Newstead noted in a blog post that when Instagram was acquired, it had only about 2% of its current user base, a mere 13 employees, and lacked significant infrastructure. She stated that many features integral to the Instagram experience today were developed using Meta’s foundational technology.
Roelof Botha, an early investor in Instagram from Sequoia Capital, suggested in a video deposition that Instagram benefitted from Meta’s technical resources, pointing out that numerous other photo-sharing applications from that era, some also supported by Sequoia, ultimately failed.
During cross-examination, Systrom also acknowledged that Facebook had contributed to Instagram’s growth prior to the acquisition by encouraging users to share their photos across both platforms. However, this option was discontinued shortly after the acquisition. Post-acquisition, Facebook integrated tabs directing users to Instagram and sent push notifications that substantially increased Instagram’s user engagement. An internal report estimated that these tactics resulted in nearly 38 million additional monthly users in 2018, with Meta allocating over $130 million in advertising for Instagram around that time.
However, Systrom later mentioned that support from Facebook diminished significantly from 2018, as Zuckerberg believed that Instagram’s growth was detrimental to Facebook’s performance. “He believed we were hurting Facebook’s growth,” Systrom explained, adding that slowing Instagram’s expansion was viewed as a way to mitigate Facebook’s decline. In his emails, Systrom expressed concern that these changes could potentially reduce Instagram’s growth by 100 million new monthly users annually.
When questioned about Zuckerberg’s feelings regarding the acquisition of Instagram, Systrom stated that it was “a complex question.” He reflected, “He was always very happy to have Instagram in the family because it was growing so quickly and we did great product work. But I think as the founder of Facebook he felt a lot of emotion around which one was better, meaning Instagram or Facebook.”
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
