WhatsApp Had No Plans To Compete With Facebook: Co-Founder Brian Acton
WhatsApp co-founder Brian Acton said that his messaging company had no plans to build social networking features to compete with Facebook before he sold the company to Mark Zuckerberg, a claim that bolsters Meta's defense as it faces federal antitrust allegations.
"We had no ambition to build Facebook-like functionality like a feed or any Facebook-like features," Acton said Tuesday during testimony at a federal courthouse in Washington. He also said that WhatsApp could have stuck with a subscription business instead of selling targeted ads if the service had remained independent.
Acton's comments came as part of the US Federal Trade Commission's antitrust trial against Meta Platforms Inc., which is in its sixth week. The agency alleges that Meta has created an illegal social networking monopoly thanks to its purchases of WhatsApp and Instagram more than a decade ago, and is seeking a breakup of the company. Meta has disputed the allegations and argued that it faces vast competition from several rivals, including TikTok and Apple Inc., that the FTC is overlooking.
Meta's acquisition of WhatsApp is a key part of the case, with FTC lawyers arguing that Meta viewed the messaging app as a legitimate social networking competitor before buying it in 2014 after a $19 billion offer. While WhatsApp didn't offer social-networking features at the time - it was a private messaging app akin to texting - lawyers for the FTC have said that several rival messaging apps were pushing into social networking around that time. It also surfaced private messages and emails from Meta executives fretting that WhatsApp may do the same.
"The biggest competitive vector for us is for some company to build out a messaging app for communicating with small groups of people, and then transforming that into a broader social network," Meta Chief Executive Officer Zuckerberg wrote to the company's board of directors in February 2013, back when the company was called Facebook.
Zuckerberg courted WhatsApp co-founder Jan Koum for over a year before the deal while Meta tracked the growth and feature sets for several mobile messaging apps, including WhatsApp, documents show.
Lawyers for Meta, meanwhile, have argued that WhatsApp had no plans to push into social networking, or launch a competitive advertising business. A handwritten note from Acton that read "No Ads! No Games! No Gimmicks!" was displayed in court earlier in the trial, and former employees and board members have testified that there were no plans for such features. Acton was called to the stand Tuesday by Meta in an effort to hammer home this point.
During his testimony, Acton was asked by an FTC lawyer whether Meta included advertising value in its offer for WhatsApp. He said he didn't know what exactly went into Meta's calculation, but assumed that advertising would be a component, given its business. Acton also acknowledged under FTC questioning that WhatsApp would have continued its push to add features had it not been acquired by Meta.
Separately, he said he had opposed Facebook's launching a business version of WhatsApp, since it would dilute end-to-end encryption, and that the commercial offering was introduced after he left the company. Part of the FTC's case has focused on trying to prove that the deals led to consumer harm that would not have happened had WhatsApp or Instagram stayed independent.
In response to questions from Meta's lawyer, Acton said Meta had offered a "fair valuation" for WhatsApp given the size of its audience. Acton also noted the success of its subscription model in seven countries in 2014 and said he believed there was an opportunity for WhatsApp to make even more money off subscriptions by raising prices.
Acton has had a colorful history with his former employer since leaving Meta in 2018. He made billions by selling his business - he's now worth $4.5 billion, according to the Bloomberg Billionaires Index - but eventually left the company after Meta started formulating plans to monetize the app via advertising. Acton thought that doing so would jeopardize the privacy of WhatsApp users, and he has since signaled some regret about selling the app. After Facebook's Cambridge Analytica privacy scandal in 2018, Acton tweeted "#DeleteFacebook."
The case is Federal Trade Commission v. Meta Platforms Inc., 20-cv-03590, US District Court, District of Columbia (Washington).
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