Zuckerberg Grilled By Antitrust Committee For Buying Out Competition
Facebook CEO Mark Zuckerberg was yesterday questioned by the US Congress Antitrust Subcommittee about the tech giant’s history of buying out competing businesses, hampering competition in the market.
Instagram was used a prime example of this at the hearing. Facebook bought Instagram for roughly $1 billion in 2012. According to a New York Times report, Facebook’s then-CFO called Instagram a competitive threat that needed to be dealt with.
“Facebook saw Instagram as a powerful threat that could siphon business away from Facebook, so rather than compete with it Facebook bought it. This is exactly the type of anticompetitive acquisition that the antitrust laws were designed to prevent,” said Judiciary Committee Chairman Jerry Nadler.
“Has Facebook ever threatened to clone the products of another company while also attempting to acquire that company?” Watch Rep. Pramila Jayapal grill Mark Zuckerberg on Facebook’s history of emulating competing products. https://t.co/Nsaog2gcCI pic.twitter.com/XUsKP8JGeR
— The New York Times (@nytimes) July 29, 2020
In response, Zuckerberg did not deny that Instagram was a competitor to Facebook.
“I’ve always been clear that we viewed Instagram as both a competitor and as a complement to our services,” said Zuckerberg. “At the time, almost no one thought of them as a general social network.”
Zuckerberg went on to say Instagram has been so successful because the company invested in it heavily, and called the app “an American success story”.