Instagrams Rise Seen as a Threat: Co-Founder Reveals Zuckerbergs Resource Cuts and Rivalry

Kevin Systrom, who co-founded Instagram, stated during his testimony that the early photo-sharing application could have thrived independently without the acquisition by Meta Platforms Inc. He also indicated that eventually, Chief Executive Officer Mark Zuckerberg viewed Instagram’s expansion as a “threat” and restricted its resource access.

These assertions may strengthen the US government’s antitrust case against the social media conglomerate, as Federal Trade Commission lawyers seek to reverse the 2012 acquisition of the photo-sharing platform, which is now utilized by nearly three billion users globally and is anticipated to account for approximately half of Meta’s US advertising revenue this year.

During his testimony on Tuesday at Meta’s antitrust hearing in Washington, Systrom recounted the rapid growth Instagram experienced prior to Zuckerberg’s acquisition proposal. “The users were continually coming in,” Systrom remembered while responding to questions from FTC lawyer Bob Zuver. The government presented a graph illustrating Instagram’s user growth before the acquisition, revealing a thirteen-fold increase in registered users in 2011, the year preceding the deal.

Systrom expressed confidence that Instagram had the potential to introduce several key functionalities, such as video support and private messaging, even without being bought by Meta—formerly known as Facebook. He emphasized that Instagram did not require infrastructure assistance, operating instead on Amazon Web Services for maintaining site operations, and that the startup could effectively tackle spam and harmful content as an independent entity.

“We would have effectively managed our content moderation,” he asserted. “It wasn’t overly complicated.” On cross-examination by Meta’s attorneys later, Systrom conceded that Instagram’s success was not guaranteed. “Things could have gone in any direction,” he admitted. “The likelihood of us failing was small, but it was still a possibility.”

Systrom, who continued with Instagram post-acquisition, mentioned that Zuckerberg’s attitude towards the photo platform fluctuated during his tenure there, eventually perceiving Instagram as a competitive threat to Facebook. He reported that Instagram infrequently received the resources he sought, including staffing for company-wide projects such as video and measures regarding data privacy. In the wake of the Cambridge Analytica privacy incident, Systrom stated that Instagram did not acquire any new personnel despite a broad initiative to improve Meta’s data practices.

“I found that unacceptable considering Instagram’s scale,” he remarked.

FTC lawyers also presented emails from Systrom expressing his dissatisfaction over Meta’s financial commitment to Instagram. In a message to former Chief Technology Officer Mike Schroepfer, Systrom stated that “we also have areas that are ‘starving’” for additional investment. In another 2017 email to the Instagram leadership, he voiced concern that, despite the company’s considerable investment intended to boost video initiatives, they received no added staff.

“We received zero of 300 additional video personnel, which is wholly unreasonable,” Systrom noted.

During the trial, Systrom recognized that all teams compete for resources and staffing, but he felt that, given Instagram’s vital role in generating revenue and growth for the company, the lack of support was disheartening.

“I was striving tirelessly for the company’s success without receiving adequate resources back,” he said. “This stood in stark contrast to my contributions.”

Later, Systrom acknowledged that the resources provided by Meta played a significant role in the app’s success and remarkable growth. “Yes, they provided numerous resources that enabled us to flourish,” he stated. 

The FTC’s lawyers are attempting to establish that Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 resulted in an unlawful social media monopoly, and they seek to persuade US District Judge James Boasberg to invalidate these transactions. After consenting to sell his company for $1 billion, Systrom continued to manage it within Facebook until 2018.

The government aims to demonstrate that Instagram was an emerging competitor to Meta that could have posed a significant challenge if it had remained independent. In the first week of the trial, the FTC presented numerous internal emails from Zuckerberg and other high-ranking executives expressing concern over Instagram’s rapid expansion and superior photo capabilities. They also intend to show that Meta’s acquisition of the popular platform harmed users by increasing advertisements and reducing safety and security measures.

In contrast, Meta has contended that Instagram’s substantial success was largely attributed to the support the company provided after the acquisition. On Tuesday afternoon, lawyers representing Meta emphasized numerous ways in which Meta contributed to Instagram’s growth, including recruiting and compensating employees, enhancing the advertising framework of the photo app, and amplifying its visibility via Facebook. At the time of the acquisition, Instagram had approximately 30 million registered users, whereas now it boasts over 2.8 billion monthly users, according to a Meta attorney. 

“Upon acquiring Instagram, it had around two percent of its current user base, just 13 employees, no revenue, and virtually no infrastructure,” Meta General Counsel Jennifer Newstead detailed in a blog post earlier this month, preceding the trial. “Many of the now-essential features of the Instagram community — including direct messaging, live video streaming, shopping, and stories — were developed using the core technology infrastructure of Meta post-acquisition.”

Roelof Botha, an early investor in Instagram from Sequoia Capital, suggested during a video deposition played in court on Monday that the app profited from Meta’s data centers and technical infrastructure. He highlighted that several other photo-sharing platforms from that era—some of which Sequoia also invested in—ultimately failed.

On the stand Tuesday, Systrom recognized that Facebook contributed to Instagram’s pre-acquisition growth, as many users shared their photos on both platforms. At that time, Instagram users were also encouraged to share their images on other social networks, including Twitter — a feature that was disabled shortly after the acquisition.

Following the acquisition, Facebook significantly increased traffic to Instagram by incorporating tabs in the Facebook app that directed users to Instagram and sending out push notifications. An internal Meta report estimated that these measures added nearly 38 million monthly users annually in 2018. Furthermore, Meta reportedly spent over $130 million (approximately Rs. 1,109 crore) on Instagram advertising, both on and off Facebook, during that period, as indicated by documents.

Systrom mentioned that Zuckerberg eventually curtailed much of this support for Instagram within the Facebook app—such as notifications and links leading back to the photo-sharing platform—beginning in 2018.

“He believed we were hindering Facebook’s growth,” Systrom remarked, adding that Zuckerberg thought slowing Instagram’s expansion would simultaneously mitigate Facebook’s decline. Emails revealed Systrom’s belief that these modifications could reduce Instagram’s growth by as much as 100 million new monthly users annually.

When asked if Zuckerberg was ultimately content with having Instagram as part of the company, Systrom described it as “a nuanced question.”

“He was always quite pleased to have Instagram within the company due to its rapid growth and successful product initiatives,” Systrom remarked. “However, I believe that as Facebook’s founder, he had emotional concerns regarding how they compared in terms of success with Instagram.”

© 2025 Bloomberg LP

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)