U.S. lawmakers hit Facebook for acquiring, copying competition

U.S. democratic lawmakers on Wednesday, July 30, grilled Facebook CEO Mark Zuckerberg over its acquisition strategy, labelling it as a monopoly.

Zuckerberg, together with Amazon’s Jeff Bezos, Google’s Sundar Pichai, and Apple’s Tim Cook virtually testified at a House antitrust subcommittee hearing on big tech’s dominance. (LOOK: Even tech titans can't escape video conference issues)

Representative Jerry Nadler (D-NY), chairperson of the full judiciary committee, zeroed in on Facebook’s acquisition of Instagram in 2012.

Citing previously unseen emails, Nadler said Zuckerberg saw Instagram as “a threat that could potentially siphon business away from Facebook" 

Zuckerberg said he viewed Instagram only as a competitor in terms of online photo-sharing.

But Nadler argued Facebook acquired it to “neutralize a potential competitor.”

Representative Joe Neguse (D-CO) described Facebook’s acquisition strategy as “land-grabbing" and said it was already a monopoly as early as 2012. Facebook later on purchased messaging service WhatsApp in 2014.

Neguse also read an email sent after the Instagram acquisition, in which Zuckerberg told a staff "you can likely buy any competitive startups, but it’ll be a while before we can buy Google." 

Zuckerberg claimed he was joking but Neguse refused to buy it.

“You have the market power to purchase or replicate competition…. Facebook, Facebook Messenger, WhatsApp and Instagram are the most downloaded apps of the last decade. Facebook owns them all. We have a word for that: monopoly," the lawmaker said.

Facebook copied Snapchat's disappearing posts with Instagram Stories back in 2017. Facebook also tried to imitate TikTok with Lasso but the project was shut down in July 2020.

Threats?

Representative Pramila Jayapal (D-WA) criticized Facebook for repeatedly copying competition. Zuckerberg said they "certainly adapted features" in the same way others copied and adapted Facebook's.

After Facebook recreates a competition, Jayapal said it then threatens owners to sell the app to them.

Prior to purchasing Instagram for $1 billion, Facebook first launched a similar app called Facebook Camera.

“After you clone the product, you approach the product and if they did not let you buy them up, there will be consequences?” Jayapal said.

Jayapal asked Zuckerberg if he threatened the founders of Instagram and Snapchat. Facebook tried to buy Snapchat but to no avail.

Zuckerberg denied the allegations. – Rappler.com

Camille Elemia

Camille Elemia is Rappler's lead reporter for media, disinformation, and democracy. She won an ILO award in 2017. She received the prestigious Fulbright-Hubert Humphrey fellowship in 2019, allowing her to further study media and politics in the US. Email camille.elemia@rappler.com

image