Former U.S. Federal Trade Commission Chair Lina Khan said Monday that Facebook “panicked” when making the acquisitions of Instagram and WhatsApp as smartphone use took off.
“It saw firms like Instagram and WhatsApp experiencing astronomical growth, and that is the point at which it resorted to this buy-or-bury scheme where, if it couldn’t outcompete a rival, it either bought them out or cut them off its network,” Khan said on CNBC’s “Squawk Box.”
Meta, the parent company of Facebook, Instagram and WhatsApp, begins a trial with the FTC on Monday. The federal government alleges that the corporate monopolized the private social networking market with its $1 billion acquisition of Instagram in 2012 and $19 billion purchase of WhatsApp in 2014.
Meta didn’t immediately reply to CNBC’s request for comment.
The trial could lead to the social media giant divesting the 2 firms. Meta has filed a pretrial transient detailing its disagreement with the FTC and reiterating that it believes the corporate doesn’t have a monopoly.
“There isn’t any expiration date in the case of the illegality of the transaction,” Khan said. “I feel there’s a way during which the complete social networking ecosystem looks different today because Facebook was permitted to exit and make these acquisitions.”
The case is, at its core, about “free and fair trade,” Khan added. Though no settlement has been reached, she said there’s at all times a possibility of a settlement before the case concludes.
With President Donald Trump recurrently holding court with tech executives, Khan said she’s “glad” that Meta and CEO Mark Zuckerberg’s efforts to dismiss the case have been, up to now, unsuccessful.
Zuckerberg donated $1 million to Trump’s inauguration fund, co-hosted an inaugural ball and has reportedly met with the president multiple times since January.
“Until the trial is over and until we actually get a liability verdict after which a treatment, we’re all going to need to wait and see,” Khan said.
