Source: YouTube

Instagram’s 2012 sale to Facebook is back in the spotlight, but this time under heavy legal fire. In the FTC’s ongoing antitrust case against Meta, Instagram cofounder Kevin Systrom testified that the company’s growth was stifled after the Instagram acquisition. His remarks have put new pressure on Meta, suggesting that the social media giant deliberately sabotaged its own subsidiary to protect Facebook’s dominance.

Systrom claimed that the Instagram acquisition, initially pitched as a partnership to expand growth, became a strategic chokehold. According to his testimony, Mark Zuckerberg viewed Instagram’s rise as a threat. Instead of investing in its success, Meta allegedly starved the platform of resources, limited its visibility, and removed vital internal support.

Emails presented in court backed up the claim. In one exchange, Systrom told Meta’s then-Chief Technology Officer that teams within Instagram were “starving” for engineering support. He cited multiple instances where Instagram was denied staffing for video development, privacy enhancements, and infrastructure, which are requests that were routinely greenlit for Facebook itself.

Instagram Acquisition Followed by Meta’s Denial of Resources

One of the most damaging points in Systrom’s testimony came when he said that Instagram was “given zero of 300” requested engineers to build video capabilities. This happened despite Instagram’s growing popularity and a shift in user behavior toward short-form content. Systrom said this lack of support was no accident but was orchestrated.

The FTC argues that the Instagram acquisition was not about growth, but about neutralizing a rival. This is central to its case. If Instagram was indeed poised to compete with Facebook head-on, then its suppression post-acquisition would signal an unlawful monopoly strategy. The court will have to weigh whether Meta acquired Instagram to help it grow or to shut it down.

Meta’s legal team pushed back during cross-examination. They argued that Instagram had no revenue and just 13 employees at the time of the acquisition. They claim Instagram’s success came precisely because of Meta’s support, tools, and access to infrastructure.

However, Systrom insisted that Instagram’s trajectory was upward before the deal. He said the platform could have developed messaging, video, and privacy tools on its own had it remained independent. While he acknowledged that the company could have failed, he called that possibility “low.”

A High-Stakes Case with Big Tech Implications

At stake in the trial is the very future of the Instagram acquisition. The FTC wants the court to consider reversing Meta’s purchase of both Instagram and WhatsApp, arguing that these deals harmed the competitive landscape.

Analysts warn that a ruling against Meta could result in the forced breakup of its most valuable platforms. Instagram, which now generates more ad revenue per user than Facebook, accounts for more than half of Meta’s overall ad income. If spun off, it would instantly become one of the most powerful independent platforms on the internet.

Critics of the Instagram acquisition point to a 2018 internal email from Zuckerberg that surfaced during the trial. In it, he floated the idea of selling off Instagram to “stop artificially growing” the app in a way that harmed Facebook. The timing matched a key shift in ad revenue, when Instagram began outperforming Facebook in profitability per user.

The FTC’s challenge is proving that Instagram could have thrived independently. Meta is trying to broaden the definition of its competitive landscape, naming rivals like TikTok, YouTube, and LinkedIn to dilute the FTC’s monopoly argument. But Systrom’s account, backed by internal communications, paints a picture of a company trying to control the social media space by taking its competitors off the board and then quietly stalling their progress.

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