Meta’s Antitrust Trial Highlights Snap’s Billion-Dollar Missed Opportunity

More than ten years after Snap Inc. SNAP declined a multibillion-dollar acquisition offer from Facebook, the topic resurfaces amid Mark Zuckerberg’s testimony during Meta Platforms Inc.’s META significant antitrust trial.

Details of the Failed Offer

On Tuesday, while on the witness stand for the second day, Zuckerberg discussed a pivotal 2013 email in which he proposed a $6 billion offer to acquire Snapchat. This amount exceeded the initially reported figure of $3 billion, according to a Business Insider report.

Zuckerberg recounted, “I delivered the offer to Evan, and he seemed to take it well. He told me he thought he could get it done and that he’d call me back quickly,” referring to Snap CEO Evan Spiegel.

However, the acquisition never went through. Zuckerberg stated that he believed Snapchat “wasn’t growing at the potential that it could” and speculated, “If we would have bought them, we would have accelerated their growth, but that’s just speculation.”

FTC’s Argument and Snap’s Response

The Federal Trade Commission (FTC) introduced Zuckerberg’s email as evidence in its case against Meta. The FTC contends that Meta sought to eliminate competition through acquisitions, notably of Instagram and WhatsApp.

In response, Snap spokesperson Monique Bellamy commented, “Anticompetitive behavior can often slow and thwart growth for smaller companies…the attempted acquisition of Snap, followed by copying its features, exemplifies such behavior.”

During the trial, Zuckerberg underscored that Snapchat remains a formidable competitor.

The Case’s Implications

The legal proceedings hold the potential to transform the tech industry. The FTC’s lawsuit suggests that Meta employed a “buy or bury” strategy to stifle competition, which could force the company to divest Instagram and WhatsApp.

Meta has countered these allegations, asserting that it faces substantial competition from platforms including TikTok and YouTube, owned by Alphabet Inc.’s GOOG GOOGL Google.

The trial is anticipated to continue for eight weeks, with revelations about Meta’s internal strategies, such as Zuckerberg’s unimplemented plan to reset all Facebook users’ connections in 2022 to enhance platform relevance.

Market Reaction

On Tuesday, Meta’s stock dropped by 1.87%, closing at $521.51, according to data from Benzinga Pro. This decline comes amidst fluctuations linked to the ongoing trial.

Meta currently holds a momentum rating of 60.72% and a growth rating of 74.91%, according to Benzinga’s proprietary Edge Rankings. These scores reflect Meta’s historical earnings and revenue growth across various periods, with an emphasis on consistent performance and recent trends.

Click here to see how it compares to Snapchat, Alphabet, and other major companies.