Congress grills Facebook over its acquisitions and feature cloning

During a massive antitrust hearing, Congress tried to force Mark Zuckerberg to answer some of the toughest questions yet around Facebook's acquisitions.

The company’s 2012 deal to buy Instagram for $1 billion came under particular scrutiny when lawmakers quoted from several emails among Facebook’s top executives, who talked about the need to “neutralize a potential competitor.” In another note, Facebook CFO Dave Wehner described the company’s strategy as a “land grab.”

Zuckerberg expanded on the idea in another email. “We can likely always just buy any competitive startups. But it’ll be a while before we can buy Google,” he wrote. Later, when asked about the quote, Zuckerberg said he didn’t remember writing the note, but said “it sounds like a joke.”

It wasn’t the only incident Zuckerberg claimed not to remember.

Some of the most intense questioning on the subject came from Washington Democrat Rep. Pramila Jayapal, who repeatedly asked Zuckerberg about Facebook's strategy of trying to copy competing apps. It led to a rather incredible exchange, in which Jayapal asked about Zuckerberg’s interactions with former Instagram CEO Kevin Systrom and Snapchat founder Evan Spiegel, both of which Zuckerberg said he didn’t recall.

“Has Facebook ever threatened to clone the products of another company while also attempting to acquire that company,” Jayapal asked. “Not that I recall,” Zuckerberg said, prompting Jayapal to remind the CEO that he was under oath.

She then asked Zuckerberg if he had used Facebook Camera to “threaten” Systrom into agreeing to an acquisition.

“I’m not sure what you would mean by ‘threaten,’” Zuckeberg said.

“Were there any other companies you used this same tactic with,” she asked, pointing to Snapchat and Zuckerberg’s well-documented pursuit of the company.

“I don’t remember those specific conversations,” he said.

Jayapal ended the questioning by calling Facebook “a case study in monopoly power.”

“Your company harvests and monetizes our data, and then your company uses that data to spy on competitors and copy, acquire and kill rivals,” she said. “You’ve used Facebook’s power to threaten smaller competitors and to ensure that you always get your way. These tactics reinforce Facebook’s dominance, which you then use in increasingly destructive ways. So Facebook’s very model makes it impossible for new companies to flourish separately and that harms our democracy.”

Zuckerberg wasn't the only CEO in attendance to face questions about his company’s acquisitions. Google CEO Sundar Pichai was also hit with tough questions around Google’s acquisition, and subsequent merger with DoubleClick.

And Amazon’s Jeff Bezos was asked about Amazon’s pursuit of diapers.com, and its “plan to win” against the competing online retailer, which eventually resulted in Amazon buying the company. Bezos, like Zuckerberg, cited a faulty memory.

“You’re asking a lot of my memory,” he said.