Meta acquisitions were ‘buy-or-bury scheme’

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 companies like Instagram and WhatsApp experiencing astronomical growth, and that’s 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 government alleges that the company monopolized the personal social networking market with its $1 billion acquisition of Instagram in 2012 and $19 billion purchase of WhatsApp in 2014.

The trial could result in the social media giant divesting the two companies. Meta has filed a pretrial brief detailing its disagreement with the FTC and reiterating that it believes the company does not have a monopoly.

“There’s no expiration date when it comes to the illegality of the transaction,” Khan said. “I think there is a way in which the entire social networking ecosystem looks different today because Facebook was permitted to go out 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 always a possibility of a settlement before the case concludes.

With President Donald Trump regularly holding court with tech executives, Khan said she’s “glad” that Meta and CEO Mark Zuckerberg’s efforts to dismiss the case have been, thus far, 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 and then a remedy, we’re all going to have to wait and see,” Khan said.