Brian Acton, co-founder of WhatsApp, testified that his company had no intentions of developing social networking features to rival Facebook prior to its acquisition by Mark Zuckerberg. This assertion supports Meta’s ongoing defense against federal antitrust accusations.
During his testimony at a federal courthouse in Washington on Tuesday, Acton stated, “We had no ambition to build Facebook-like functionality like a feed or any Facebook-like features.” He also mentioned that WhatsApp could have maintained a subscription-based revenue model instead of transitioning to targeted advertising had it remained independent.
Acton’s remarks are part of the ongoing antitrust trial by the U.S. Federal Trade Commission (FTC) against Meta Platforms Inc., which has now entered its sixth week. The FTC argues that Meta has established an illegal monopoly in social networking through its acquisitions of WhatsApp and Instagram over the past decade and is pursuing a breakup of the company. Meta contests these allegations and asserts that it faces significant competition from various rivals, including TikTok and Apple, which the FTC has overlooked.
The acquisition of WhatsApp is central to the FTC’s case, with attorneys claiming that Meta considered the messaging app a viable competitor in the social networking space before buying it for $19 billion in 2014. At the time of the acquisition, WhatsApp functioned primarily as a private messaging service. The FTC has presented evidence of internal communications among Meta executives expressing concerns that WhatsApp might venture into social networking.
“The biggest competitive vector for us is for some company to build out a messaging app for communicating with small groups of people, and then transforming that into a broader social network,” Meta CEO Zuckerberg wrote to the board in February 2013, when the company was still known as Facebook.
Zuckerberg’s effort to engage WhatsApp co-founder Jan Koum lasted over a year leading up to the agreement, while Meta monitored the advancements and feature rollouts of various mobile messaging applications, including WhatsApp, as documented.
In defense, Meta’s legal team argued that there were no plans by WhatsApp to enter the social networking arena or to establish a competitive advertising business. A handwritten note from Acton that read “No Ads! No Games! No Gimmicks!” was displayed in court, and former staff members testified that initiatives for such features were nonexistent. Acton took the stand on Tuesday at Meta’s request to reinforce this narrative.
During his testimony, an FTC lawyer inquired whether advertising value was included in Meta’s WhatsApp acquisition offer. Acton admitted he was unsure of the specifics but inferred that advertising was likely part of the valuation due to Meta’s business model. He also acknowledged that WhatsApp would have pursued feature enhancements if it had not been acquired by Meta.
Acton expressed opposition to Facebook’s plans to launch a business version of WhatsApp, arguing that it would compromise end-to-end encryption. He noted that the commercial version was rolled out after his departure from the company. The FTC’s case seeks to demonstrate that these acquisitions resulted in consumer detriment that would not have occurred had WhatsApp or Instagram operated independently.
In responses to questions posed by Meta’s attorney, Acton stated that he believed Meta’s offer for WhatsApp was a “fair valuation” based on the application’s audience size. He reflected on the success of WhatsApp’s subscription model in seven countries back in 2014 and suggested there was potential for further revenue through subscription price increases.
Since his departure from Meta in 2018, Acton has navigated a complex relationship with his former employer. Though he profited significantly from the sale of WhatsApp, he left amid concerns about the company’s shift towards monetization through advertising, which he believed jeopardized user privacy. Acton has expressed some regret regarding the decision to sell the app, notably tweeting “#DeleteFacebook” following the Cambridge Analytica privacy scandal in 2018.
The case is Federal Trade Commission v. Meta Platforms Inc., 20-cv-03590, in the U.S. District Court for the District of Columbia (Washington).
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