Systrom said during testimony in a landmark antitrust trial that he believed Meta viewed Instagram as a threat and denied it resources. — JASON HENRY/The New York Times
WASHINGTON: Kevin Systrom, a co-founder of Instagram, testified April 22 in a landmark federal antitrust trial that his startup was starved of resources after Meta bought it because Mark Zuckerberg, the CEO, was afraid of the success of the photo-sharing app.
“Mark was not investing in Instagram because he believed we were a threat to their growth,” Systrom said.
Systrom’s more than six hours of testimony was among the most pointed for the government’s case that Meta had purchased Instagram in 2012 as part of a “buy-or-bury strategy” to illegally cement its social media monopoly by killing off its rivals. The Instagram co-founder made millions when Zuckerberg bought his company, but Systrom sharply contradicted Meta’s defence during hours on the stand in US District Court of the District of Columbia.
Last week, Zuckerberg testified that the social media giant, formerly known as Facebook, used its deep pockets to invest in Instagram after its purchase.
Systrom countered Tuesday that he left Meta in 2018 because of Zuckerberg’s lack of investment. At that time, Instagram had grown to 1 billion users, about 40% of Facebook’s size, yet the photo-sharing app had only 1,000 employees compared with 35,000 employees at Facebook, he said.
“We were by far the fastest growing team,” Systrom said. “We produced the most revenue, and relative to what we should have been at the time, I felt like we should have been much larger.”
He said he found the decisions baffling. When asked by a lawyer for the Federal Trade Commission why Zuckerberg might have decided to give Instagram fewer resources, Systrom said the Facebook co-founder believed it was a threat to the app he had created.
“As the founder of Facebook, he felt a lot of emotion around which one was better, meaning Instagram or Facebook,” Systrom added. “And I think there were real human emotional things going on there.”
The case, Federal Trade Commission v. Meta Platforms, entered its second week Monday and hinges on Meta’s purchases of Instagram, more than a decade ago for US$1bil, and WhatsApp, in 2014 for US$19bil. The government has argued that the acquisitions harmed competition by removing promising startups from the market that could have challenged Meta’s dominance.
The company and Zuckerberg were paranoid about the rise of smaller rivals, which offered superior products to those built by Meta, the government has argued. By buying both companies, Meta hurt competition and consumers who were deprived of more choices, according to the government.
The FTC seeks to break up the social media giant, threatening Meta’s US$165bil (RM727.32bil) advertising business and upending the way 3.5 billion users get and share information from the company online.
Zuckerberg, the first witness called by the FTC, said last week that Meta provided key technological help to Instagram, including spam filtering technology and eventually computing systems to store content and operate the app.
On Tuesday, Systrom said that Instagram had spam “under control”, and that the company already had a solid technology infrastructure provided by Amazon.
The government’s case against Meta is part of a broad assault against the power of the biggest tech companies. Last week, the Justice Department won an antitrust case against Google’s monopoly in parts of ad technology, the second government victory after winning a case against Google’s search monopoly last year. On Tuesday, in the same courthouse where Systrom testified, a judge heard arguments from the Justice Department to break up Google over its anticompetitive behavior to dominate search.
The FTC and the DOJ have also sued Amazon and Apple over claims of anticompetitive behavior.
The Trump administration first sued Meta over allegations of an anticompetitive acquisition strategy in December 2020. The case is the third against a tech giant to go to trial in two years.
The FTC is testing antitrust law with a novel case against Meta that relies on a rarely used legal theory that the social media company sought to kill competition through mergers.
The government’s questioning of Systrom focused on events from around the time he co-founded Instagram in 2010. From the time of its launch, growth was “exponential, unstoppable”, Systrom said. The app registered 25,000 users its first day. By January 2012, Instagram was adding 4 million users a month.
During a cross-examination later in the day, Meta’s attorney, Kevin Huff, pointed to past public comments where Systrom lauded Facebook’s support. Before the acquisition, Systrom said in an interview he was holding the app together by “duct tape”. After, he said employees “snapped our fingers” for access to salespeople.
“We grew much more quickly because we were part of Facebook than we would have as an independent company,” Systrom said Tuesday.
The government previously pressed Zuckerberg about the acquisitions, showing him internal communications about Meta’s growing rivalry with Instagram. In one email, Zuckerberg said he sought to “neutralise” Instagram as a competitor.
On Feb 11, 2012, Zuckerberg proposed that Meta acquire Instagram and “keep their product running and just not add more features to it”.
The FTC has also argued that other investors wanted to buy or pump funds into Instagram, something that could have transformed it into a true rival.
Roelof Botha, a partner at Sequoia Capital, which invested in Instagram, said in video testimony Monday that the venture capital firm would have been able provide funding to support the company’s growth.
Instagram had investors feeling like it was “lightning in a bottle”, he said. He wanted to invest more money into Instagram but faced intense competition.
There were “too many pigs at the trough”, Botha added.
In negotiations with Zuckerberg to buy Instagram, Systrom said Tuesday he asked for as much as US$4bil.
“I think they got a screaming deal,” he said. – ©2025 The New York Times Company
This article originally appeared in The New York Times.
