Mark Zuckerberg threatened 'ominous ramifications' to Instagram if it …
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Mark Zuckerberg threatened 'ominous ramifications' to Instagram if it did not team up with Facebook, leaving his competitors fearing the 'wrath of Mark', according to the lawsuit which aims to break up his social media empire.
Backed by 46 states and a federal agency, the legal filing sets out 123 pages of evidence against Facebook and accuses it of a 'buy-or-bury strategy' to maintain what it claims is an illegal monopoly.
The lawsuit cites numerous emails among Facebook staff and gives many accounts of conversations involving Zuckerberg, who allegedly once remarked: 'One thing about startups is you can often acquire them'.
On other occasions he indicated that buying up rivals would 'enable Facebook to 'build a competitive moat' or 'neutralize a competitor', the lawsuit says.
Facebook has vowed to contest the lawsuit, calling it 'revisionist history' which ignores the fact that the sale of Instagram and WhatsApp was approved by regulators years ago.
Here are some of the allegations:
New lawsuits from 46 states and the FTC accuse Facebook CEO Mark Zuckerberg of anti-competitive conduct and seek to break up the company
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Early years: Facebook 'hones its tactics to avoid competition' Facebook enjoyed meteoric early growth by out-competing other websites such as Myspace.
But Zuckerberg and his colleagues had already 'honed some tactics' to 'extinguish or impede' their rivals, the lawsuit claims.
In 2009, Facebook made an 'aggressive overture' to FriendFeed, an aggregator which pulled together content from various social media sites.
Fearing that Twitter was about to acquire the company, Facebook bought it out.
One Facebook employee who had described FriendFeed as 'the company I fear most' expressed the sentiment in an email that 'we can just buy them'.
In 2010, Facebook bought a Malaysian company called Octazen which provided contact details for potential users.
Facebook was already licensing the company's services, but when it turned out Twitter was doing the same, attention turned to how Facebook could 'deprive rivals and potential rivals of this important resource', the lawsuit claims.
A Facebook executive said that 'an acquisition could be interesting if for a few million we could slow some competitors down for a quarter or so'.
Once Facebook bought the firm, it 'terminated all third-party access to Octazen'.
'The wrath of Mark': Zuckerberg buys out 'really scary' Instagram The lawsuit says that Facebook 'increasingly took anticompetitive steps to maintain its monopoly' from about 2012, after it had seen off the short-lived threat from Google Plus.
By this time, Facebook bosses were becoming 'frightened' at how other firms were moving ahead in the mobile world, it is claimed. Zuckerberg said it was 'really scary' that Facebook was 'very behind' Instagram, telling colleagues they 'might want to consider paying a lot of money' for it.
Asked by his chief financial officer about the motivations for the buyout, Zuckerberg said it was a mixture of wanting to 'neutralize a potential competitor' and 'integrate their products with ours in order to improve our service'.
Instagram's CEO Kevin Systrom apparently feared that Zuckerberg would 'go into destroy mode' if he refused the deal, adding: 'I don't think we'll ever escape the wrath of Mark...
it just depends how long we avoid it'.
According to the lawsuit, Zuckerberg 'made it clear to Systrom that there would be ominous ramifications if Instagram did not partner with Facebook'.
'Of course, at the same time we're developing our own photos strategy, so how we engage now will determine how much we're partners vs.
competitors down the line,' Zuckerberg apparently said.
In April 2012, Facebook bought out Instagram for $1billion, allowing it to discontinue its own Facebook Camera app.
'Rather than responding to the threat with innovative product development, Facebook simply eliminated Instagram through acquisition,' the lawsuit charges.
New York Attorney General Letitia James, a Democrat, led the coalition of 46 states, plus DC and Guam, in the lawsuit seeking to split up Facebook
WhatsApp is bought out for a massive $19billion fee that 'shocked and surprised' Facebook staff Facebook faced a 'unique threat' to its monopoly from the rise of online messaging services which allowed people to avoid SMS charges and exchange better-quality pictures, the lawsuit says.
By 2013, WhatsApp had surpassed Facebook Messenger with 12.2billion messages sent on the platform every day.
One Facebook executive allegedly said they were 'super-paranoid' about the threat from WhatsApp, while Zuckerberg believed it 'had the potential to enter Facebook's core market and erode its monopoly power'.
When Facebook bought out WhatsApp for $19billion in 2014, there was said to be 'shock and surprise' among Facebook's own staff at how much they had paid.
The 'only rationale' for this, the lawsuit claims, was the 'elimination of a potential competitor poised to mount a major challenge to Facebook's monopoly'.
Once the buyout was complete, Facebook changed whatsapp api's terms of service and privacy policy by combining user data with its other products.
This led to a reduction of consumer choice by 'eliminating a viable, competitive, privacy-focused option,' it is alleged.
Facebook shares fell steadily on Wednesday as news of the pending lawsuit began to spread, and they opened down again on Thursday morning
Facebook's value has grown from around $70billion to more than $700billion in the period in which officials claim the company has been illegally running a monopoly
Backed by 46 states and a federal agency, the legal filing sets out 123 pages of evidence against Facebook and accuses it of a 'buy-or-bury strategy' to maintain what it claims is an illegal monopoly.
The lawsuit cites numerous emails among Facebook staff and gives many accounts of conversations involving Zuckerberg, who allegedly once remarked: 'One thing about startups is you can often acquire them'.
On other occasions he indicated that buying up rivals would 'enable Facebook to 'build a competitive moat' or 'neutralize a competitor', the lawsuit says.
Facebook has vowed to contest the lawsuit, calling it 'revisionist history' which ignores the fact that the sale of Instagram and WhatsApp was approved by regulators years ago.
Here are some of the allegations:
New lawsuits from 46 states and the FTC accuse Facebook CEO Mark Zuckerberg of anti-competitive conduct and seek to break up the company
RELATED ARTICLES
Share this article
Share
91 shares
Early years: Facebook 'hones its tactics to avoid competition' Facebook enjoyed meteoric early growth by out-competing other websites such as Myspace.
But Zuckerberg and his colleagues had already 'honed some tactics' to 'extinguish or impede' their rivals, the lawsuit claims.
In 2009, Facebook made an 'aggressive overture' to FriendFeed, an aggregator which pulled together content from various social media sites.
Fearing that Twitter was about to acquire the company, Facebook bought it out.
One Facebook employee who had described FriendFeed as 'the company I fear most' expressed the sentiment in an email that 'we can just buy them'.
In 2010, Facebook bought a Malaysian company called Octazen which provided contact details for potential users.
Facebook was already licensing the company's services, but when it turned out Twitter was doing the same, attention turned to how Facebook could 'deprive rivals and potential rivals of this important resource', the lawsuit claims.
A Facebook executive said that 'an acquisition could be interesting if for a few million we could slow some competitors down for a quarter or so'.
Once Facebook bought the firm, it 'terminated all third-party access to Octazen'.
'The wrath of Mark': Zuckerberg buys out 'really scary' Instagram The lawsuit says that Facebook 'increasingly took anticompetitive steps to maintain its monopoly' from about 2012, after it had seen off the short-lived threat from Google Plus.
By this time, Facebook bosses were becoming 'frightened' at how other firms were moving ahead in the mobile world, it is claimed. Zuckerberg said it was 'really scary' that Facebook was 'very behind' Instagram, telling colleagues they 'might want to consider paying a lot of money' for it.
Asked by his chief financial officer about the motivations for the buyout, Zuckerberg said it was a mixture of wanting to 'neutralize a potential competitor' and 'integrate their products with ours in order to improve our service'.
Instagram's CEO Kevin Systrom apparently feared that Zuckerberg would 'go into destroy mode' if he refused the deal, adding: 'I don't think we'll ever escape the wrath of Mark...
it just depends how long we avoid it'.
According to the lawsuit, Zuckerberg 'made it clear to Systrom that there would be ominous ramifications if Instagram did not partner with Facebook'.
'Of course, at the same time we're developing our own photos strategy, so how we engage now will determine how much we're partners vs.
competitors down the line,' Zuckerberg apparently said.
In April 2012, Facebook bought out Instagram for $1billion, allowing it to discontinue its own Facebook Camera app.
'Rather than responding to the threat with innovative product development, Facebook simply eliminated Instagram through acquisition,' the lawsuit charges.
New York Attorney General Letitia James, a Democrat, led the coalition of 46 states, plus DC and Guam, in the lawsuit seeking to split up Facebook
WhatsApp is bought out for a massive $19billion fee that 'shocked and surprised' Facebook staff Facebook faced a 'unique threat' to its monopoly from the rise of online messaging services which allowed people to avoid SMS charges and exchange better-quality pictures, the lawsuit says.
By 2013, WhatsApp had surpassed Facebook Messenger with 12.2billion messages sent on the platform every day.
One Facebook executive allegedly said they were 'super-paranoid' about the threat from WhatsApp, while Zuckerberg believed it 'had the potential to enter Facebook's core market and erode its monopoly power'.
When Facebook bought out WhatsApp for $19billion in 2014, there was said to be 'shock and surprise' among Facebook's own staff at how much they had paid.
The 'only rationale' for this, the lawsuit claims, was the 'elimination of a potential competitor poised to mount a major challenge to Facebook's monopoly'.
Once the buyout was complete, Facebook changed whatsapp api's terms of service and privacy policy by combining user data with its other products.
This led to a reduction of consumer choice by 'eliminating a viable, competitive, privacy-focused option,' it is alleged.
Facebook shares fell steadily on Wednesday as news of the pending lawsuit began to spread, and they opened down again on Thursday morning
Facebook's value has grown from around $70billion to more than $700billion in the period in which officials claim the company has been illegally running a monopoly
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