About a year before the Federal Trade Commission first opened its antitrust investigation into Meta’s acquisitions of Instagram and WhatsApp, CEO Mark Zuckerberg internally suggested “the extreme step of spinning Instagram out as a separate company.”
In a 2018 email to his executives, Zuckerberg wrote that, “while most companies resist break-ups, the corporate history is that most companies actually perform better after they’ve been split up.” The memo was displayed in court on Tuesday as he testified in the FTC’s anti-monopoly case, where Meta is fighting a government lawsuit that could lead to it being broken up.
Meta spent billions acquiring Instagram in 2012 and WhatsApp in 2014. But by 2018, Zuckerberg sensed that shifting politics could lead to, as he wrote in the memo, “a non-trivial chance we will be forced to spin out Instagram and perhaps WhatsApp in the next 5-10 years.” He warned his exec team that, “We should keep in mind that there’s a real chance that all our work to build a family of apps may be something we don’t get to keep.”
“It’s not too hard to imagine the calls increasing to break up the tech companies, and the next democratic president taking action to do so,” Zuckerberg wrote during President Donald Trump’s first term in office. “At that point, we will face extremely high pressure, brand damage and distraction.”
Meta is now in the midst of an antitrust trial where it’s defending itself from the FTC’s allegations that it illegally monopolized a subset of the social media market through its acquisitions of Instagram and WhatsApp, both of which the agency is seeking to unwind. The FTC charges that Zuckerberg made these purchases to squash potential rivals and further his company’s dominance. Meta argues that the case is “at war with the facts and at war with the law.”
While Meta may be fighting a breakup now, Zuckerberg has clearly been thinking about the possibility for a while. “I understand the business value of having Instagram and Facebook together, so I don’t raise this lightly,” he wrote in 2018. “I’m also not suggesting this is the likely outcome. But I don’t think it is quite as crazy as it may initially seem, either.”
