Zuckerberg Tried to Sidestep Antitrust Trial with $450 Million Settlement, Claims Report

Just days before its landmark antitrust trial began, Meta tried to settle the case by making a USD 450 million offer, a move that was led personally by CEO Mark Zuckerberg. Reports say that Zuckerberg contacted Federal Trade Commission (FTC) Chairman Andrew Ferguson in late March with the offer. However, the FTC wanted something closer to a figure that was reportedly in the neighborhood of 30 billion USD, plus a consent decree, and deemed Meta's offer too low. Ferguson was unpersuaded and let the case go to trial.

The FTC's case contests the purchases by Meta of Instagram and WhatsApp. It accuses Meta of trying to eliminate competition and secure an iron grip on social media.

Trial Threatens Breakup of Instagram and WhatsApp

The trial, which commenced on April 14, has the potential to result in a ruling that would require Meta to reverse its well-known acquisitions. The FTC maintains that the purchases of Instagram and WhatsApp were not about innovation, but about stifling competition and increasing dominance in the marketplace. The emails presented during the trial have certainly raised eyebrows, and for good reason. One email in particular, sent in 2008 by none other than Mark Zuckerberg, has the look of a smoking gun.

An internal memo from 2018, which was made public during the trial, shows that Zuckerberg had thought about spinning off Instagram. This was at a time when antitrust concerns were increasing. It's worth noting that this memo does not describe any step that actually was taken. What we have is a document that highlights the company's awareness of pressure from regulators that was becoming more intense.

Meta’s Defense: Competitive Market and Consumer Gains

Meta has pushed back on the FTC’s accusations, asserting that it vies for consumers in a fast-moving competitive landscape alongside platforms like TikTok, YouTube, LinkedIn, and X. Advocates for the firm maintain that both end users and the overall tech ecosystem have reaped benefits from the purchases in question, and they argue that the case against them is based on a stale, overly reductive take on the marketplace.

Meta criticized the accusation and emphasized that even the youngest users would know that Instagram and TikTok obviously compete. A Meta spokesperson said that his trial sets a bad precedent. The FTC says companies like Meta should not be able to grow through acquisitions. If they do, they should be broken up even when their services are not obviously competing.

Zuckerberg’s Political Lobbying Yields No Results

In the weeks just prior to the trial, Zuckerberg worked to secure political support, even lobbying President Donald Trump and his aides in an effort to directly influence the outcome of the trial. He held several high-level meetings at the White House, but in the end, they did not have much impact. Trump was not moved to intervene, and that absence of a White House intervention was a win for the FTC.

Zuckerberg's larger initiative to repair the relationship with Trump, through monetary donations and changes in policy, seems to have not worked. The trial is now a focal point in Washington's Big Tech pushback, another round in the ongoing argument about how much regulation the tech sector is going to have to live by.