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Facebook bought, copied, threatened competition: 11 key takeaways from Zuckerberg’s deposition before the antitrust subcommittee

Mark Zuckerberg

In his introductory remarks at the Big Tech CEOs’ hearing before the House subcommittee on antitrust on July 29 (available to watch here), Facebook founder and CEO Mark Zuckerberg conveniently gave a skewed picture of Facebook’s dominant position.

“In many areas, we’re behind our competitors. The most popular messaging service in the US is iMessage. The fastest growing app is TikTok. The most popular app for video is YouTube. The fastest growing ads platform is that of Amazon. The largest ads platform is Google. And for every dollar spent on advertising in the US, less than 25 cents is spent with us.” — Mark Zuckerberg

However, this doesn’t take into account Facebook’s incumbent position as the leading social media platform, nor gives Facebook’s market share for advertising.

Here are the biggest takeaways from Zuckerberg’s hearing:

1. Facebook was a monopoly as early as 2012: Representative Joe Neguse (D-CO), the vice-chair of the subcommittee, cited a 2012 presentation given by Facebook CFO Sheryl Sandberg that read “Facebook is now 95% of all social media in the US” in a slide titled “The industry consolidates as it matures”. This, as Neguse pointed out, suggests that Facebook was a monopoly as early as 2012. The competitors that it had in 2004 when it launched — MySpace, Friendster, Orkut, Yahoo 360, etc. — had all disappeared by 2012.

Facebook’s MO

2. Facebook buys competition, as it did with Instagram, in violation of antitrust laws: Neguse quoted an email sent by Zuckerberg in which Zuckerberg boasted about Facebook’s ability to “buy any competitive start-up, but it will be a while before we can buy Google”. During questioning by Nadler, Zuckerberg eventually conceded that when Facebook bought Instagram in 2012, he considered Instagram a competitor “in the space of mobile photos and camera apps”. Internal emails exchanged between Zuckerberg and his employees that were cited by Nadler showed that Instagram was considered a threat through and through, and the aim was to “neutralise a potential competitor” (Nadler).

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  • In one of the emails, cited by Neguse and Matt Gaetz (R-FL), Facebook engaged in “a land grab” to “shore up our position”.

3. Zuckerberg threatened Instagram co-founder Kevin Systrom: Japayal relayed that Zuckerberg’s statements to Systrom sounded like threats to the latter. “Systrom confided in an investor at the time that he feared” that Zuckerberg would go into “‘Destroy Mode’ if he [Systrom] didn’t sell Instagram to you [Zuckerberg],” Jayapal said.

  • Facebook’s acquisition of Instagram is under scanner: Chairperson of the Judiciary Committee Representative Jerrold Nadler (D-NY) said that Instagram’s acquisition by Facebook was in violation of antitrust laws and “should never have happened in the first place”. David Cicilline (D-RI), the chair of the subcommittee, said that “the failures of the FTC in 2012 do not alleviate the antitrust challenges” that Nadler described.

4. Facebook made multiple plays for Snapchat, copied its features: Neguse’s questioning revealed that Facebook had made “several overtures to Snapchat” which rebuffed all those efforts.

5. Facebook copied competitors features: Representative Pramila Jayapal (D-WA) cited Facebook emails wherein Zuckerberg told his team that “moving faster and copying other apps” could “prevent our competitors from getting footholds” to which Zuckerberg conceded that copying features is a common business practice that Facebook and others have indulged in.

  • Jayapal’s questioning revealed that in the midst of attempting to buy Snapchat, Zuckerberg had warned Evan Spiegel, Snapchat founder, that Facebook was cloning Snapchat’s features.
  • The day of the hearing, the embattled short-video app TikTok entered a letter for the subcommittee’s consideration in which TikTok CEO Kevin Mayer accused Facebook of “launching another copycat product, Reels (tied to Instagram), after their other copycat Lasso failed quickly”. In response to a question by Steube about whether the Chinese government steals technologies from American companies, Zuckerberg said, “I think it’s well documented that the Chinese government steals technology from American companies.”

6. The House Judiciary chairperson asked Zuckerberg why Instagram shouldn’t be broken off into a separate company, but Zuckerberg replied that at the time of acquisition, it was not obvious or guaranteed that Instagram would reach the scale that it has today. The founders’ talent and Facebook’s investment into Instagram’s infrastructure, promotion and security made Instagram do “wildly well”, he said.

7. Facebook used its policies to browbeat competitors: In response to questions by Representative Val Demings (D-FL), Zuckerberg revealed that in 2012, the company weaponised its policies to target “larger competitors from using our platforms to grow and compete with us”.

  • Demings cited the case of MessageMe, which was identified as a fast-growing app by a Facebook employee in 2013, and thus its access was restricted.
  • In 2014, Facebook employees sought to remove Pinterest’s access to Facebook’s platform tools, but not Netflix’s. Zuckerberg claimed ignorance about that exchange.

8. Facebook has access to troves of data on competitors: Through the Like button, APIs, trackers etc., Facebook had insights into its competitors’ websites and apps, Representative Henry C. Johnson (D-GA) revealed. Zuckerberg attempted to brush it off as normal market research done by all companies, but Johnson questioned him on a Facebook vice president’s email that sought to build an analytics programme that could separate “friend from foe”.

9. Facebook acquired Onavo to get insight into competitors’ usage (big surprise, not) and Zuckerberg’s story fell apart: In 2013, Facebook had acquired Onavo to access users’ app usage and get unparalleled insight into which apps were popular amongst users and which weren’t. Johnson pointed out that the invasive nature of Onvao Protect app got Facebook kicked out of Apple’s App Store in 2018, which Zuckerberg tried to first play off as a voluntary move by Facebook, and then as a change in Apple’s App Store policies.

  • Zuckerberg initially forgot about Facebook Research app that collected data from and of teens: Johnson also brought up Facebook’s much maligned Facebook Research app that paid teenagers to download the app. The Research app was first blocked by Apple, and Google soon followed suit. During the hearing, Zuckerberg could not remember the details about Facebook Research, but later corrected the record to said “I wasn’t familiar with that name for it, but I just want to be clear that I do recall that we used an app for research and it has since been discontinued”. His confusion about the app makes sense because in June 2019, Facebook launched Study from Facebook for market research, that had the same partners as Facebook Research and did practically the same things.

Read: Facebook launched new market research app ‘Study’, despite its own dubious history

10. Facebook used data from Onavo to purchase WhatsApp (again, not a surprise): In response to Johnson’s question about whether Facebook used the “capability” of Onavo and Facebook Research to purchase WhatsApp, Zuckerberg said that “it was one of the signals that we had about WhatsApp’s trajectory, but we didn’t need it”. It is interesting that with WhatsApp, where Facebook had this clandestine “market research”, was already a “great product” whose founder — Zuckerberg — knew personally despite being popular primarily in developing countries at the time, but with Instagram, which was popular in the US, Facebook hadn’t been sure of its success.

11. Facebook exerts disproportionate influence on online content

Facebook’s dominance made publishing and news industry collapse: Nadler called Zuckerberg out for its flawed report that caused newsrooms across the world to “pivot to video” due to inflated video viewership numbers that Facebook cited in its report. Zuckerberg claimed that he had no knowledge that the metrics were inflated before they were publicly released and said that since then, the company had put in additional measures to audit such reportage.

Due to Facebook’s monopoly, it has no incentive to moderate its own platform: Cicilline argued that since Facebook uses algorithms to decide how advertisements are disseminated, it is a business decision and thus, Facebook should be held responsible for it. And since Facebook is the “only game in town”, “there is no competition forcing you to police your own platform”, Cicilline said.

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Facebook’s content policies won’t be determined by advertisers: With reference to the #StopeHateForProfit campaign through which major advertisers boycotted Facebook for its refusal to tamp down on racist and bigoted content, Jayapal asked Zuckerberg if Facebook was “so big that you don’t care how you are impacted by a major boycott of 1,100 advertisers”. Zuckerberg said that the company cared about the boycott, but would not set aside its content policies because of its advertisers.

Facebook is too big to contain deadly content: Citing the case of a particular Breitbart video that spread misinformation about COVID-19 but still gathered 20 million views and over 100,000 comments in the five hours that it took Facebook to remove it, Cicilline argued that Facebook “is so big that even with the right policies in place”, it “cannot contain deadly content”.

Republican representatives were more concernced about protecting conservatives’ freedom of speech than about monopolisation of markets: Greg Steube, for instance, asked Zuckerberg on how Facebook ensured ideological diversity of its content moderators. Gaetz focused on Facebook’s alleged bias against conservative opinions and voices, both amongst users and employees. Zuckerberg maintained that Facebook was a platform for all ideas.

Politicians show a fundamental lack of understanding of technology

Twitter’s presence does not require the physical presence of Jack Dorsey to leave a mark: Representative Frank Sensenbrenner (R-WI) asked Zuckerberg about how Donald Trump Jr’s account was taken down because of his post about “efficacy of hydroxychloroquine” and how the debate around its effectiveness was a “legitimate matter of discussion”. Zuckerberg reminded him that it happened on Twitter, not Facebook. And he clarified that Facebook would also take down content that claims that a drug is proven to cure a disease when it is not (though it hasn’t done that with a lot of misleading posts by conservative American politicians so far). Representative Jim Jordan (R-OH) said that Twitter CEO Jack Dorsey had also been called, but Dorsey made his remarks after the hearing, through his own platform.

Facebook does not use cookies to collect personal information (and it doesn’t need to!): McBath quoted Facebook’s original 2004 privacy policy as per which the company said, “We do not and will not use cookies to collect private information from any user.” Zuckerberg said that was still the case but McBath assumed that only cookies could be used to collect PII, and that cookies collected only PII. She was wrong on both counts — location data, IP Address, MAC address of the device being used, information actually provided by the user can be and is used to glean sensitive information about the user by Facebook, all without using cookies. Similarly, cookies also allow users to remain logged in, or work on a website across different tabs/windows. Thus, Zuckerberg did not lie that Facebook doesn’t use cookies to collect PII, but I think McBath meant to ask if Facebook collects any PII without consent at all. 

And a bit of grandstanding

In response to Representative Ken Buck’s (R-CO) question that none of the platforms would tolerate slave labour “in manufacturing your products or in products that are sold on your platforms”, Zuckerberg said that the company would not tolerate it and if something like this is found, the relationship would be terminated. However, while Facebook may not be engaging in “slave labour”, it is a pretty toxic workplace for its online content moderators.

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Documents cited by respresentatives:



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