The boss of Instagram feared Mark Zuckerberg would go into “destroy mode” if he turned down an acquisition attempt by Facebook, documents have revealed.
Kevin Systrom, the co-founder of Instagram, wrote in a text message in 2012 he did not think his app could escape “the wrath of Mark”. Facebook bought Instagram in a $1bn (£770m) deal later that year.
While the deal was investigated by competition authorities, it was ultimately waved through. Instagram, the photo sharing app, has since gone on to become almost as large as Facebook itself with more than one billion users.
The text messages were released as part of a trove of documents by US politicians after they interrogated the bosses of Facebook, Apple, Amazon, and Google on Wednesday.
Congress is probing claims big tech firms stifle competition and acquire and kill off rivals. David Cicilline, chairman of the House Antitrust Subcommittee, said some of the Big Tech firms may need to be “broken up”.
In texts to an investor, Mr Systrom, who left Facebook in 2018, said the start-up, which at the time had just 13 staff, had to “plan for the inevitability of Facebook hating us”.
Documents from the Hearing on “Online Platforms and Market Power: Examining the Dominance of Amazon, Apple, Facebook and Google” pic.twitter.com/IzWZJHVIBG
He added he didn’t want to “shutter the product [Instagram] and that doesn’t align with what FB [Facebook] does with companies”.
The messages in February that year appeared to show a reluctance to sell. However, later emails between Mr Systrom and Mr Zuckerberg, also released by the Committee, showed the deal coming together.
“I’m optimistic we can do something,” Mr Zuckerberg emailed in early April, “especially since we both seem to want to work together.” Days later, the deal was agreed.
While the deal was cleared by regulators at the time, members of the Committee questioned whether it had stifled competition. Jerrold Nadler, a Democratic member, said: “If this was an illegal merger at the time of the transaction, why shouldn’t Instagram now be broken off into a separate company?”
Mr Zuckerberg, however, told the Committee: “People did not think of them as competing with us [as a social network]. It now reaches many more people than [Systrom and Zuckerberg] thought possible.” He said regulators at the time unanimously voted not to stop the deal.
According to other documents, Mr Zuckerberg was concerned Instagram could be “very disruptive to us” in emails to his finance chief. He agreed with his advisor that one reason to buy Instagram would be to “neutralise the competition”.
He then clarified he “didn’t mean” they wanted to “prevent them from competing”, but would aim to integrate them into their technology.
“It is a violation of the Sherman Act to buy out a direct competitor to eliminate them as a danger and protect a monopoly,” Columbia University professor and antitrust expert Tim Wu wrote on Twitter. The 1890 Sherman Antitrust Act has broad provisions that tech critics like Wu say need to be more aggressively enforced.
The House Committee that held Wednesday’s hearing is expected to release its final report by early September.
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News – Instagram boss feared Zuckerberg would go into ‘destroy mode’ if he rejected offer