Sandberg Defends Meta Acquisitions as FTC Pushes for Historic Tech Breakup in Antitrust Trial

Meta's Antitrust Showdown: Sandberg Testimony Reveals Internal Strategies as Divestiture Looms

In the high-ceilinged courtroom of the U.S. District Court, Sheryl Sandberg's testimony cut through the tension like a blade. The former Meta chief operating officer, who left the company in 2022 after 14 years as Mark Zuckerberg's second-in-command, found herself defending decisions that could reshape the future of one of tech's most dominant empires.

"The only justification for acquiring a company is it becomes more valuable to the acquirer than it would be independently," Sandberg testified, her voice steady as she addressed the court in what has become the most significant antitrust challenge in Meta's history.

The Federal Trade Commission's landmark trial, now in its second week, seeks nothing less than the dismantling of the social media behemoth through the forced divestiture of Instagram and WhatsApp. For Meta, a company that has weathered privacy scandals, congressional hearings, and a major rebrand, this represents an existential threat to its business model.

Behind Closed Doors: The "Block or Buy" Strategy Exposed

Sandberg's testimony provided a rare glimpse into Meta's executive decision-making during periods of intense competitive pressure. In one particularly revealing moment, she acknowledged that the company had considered blocking advertisements from emerging rivals such as Google Plus, KakaoTalk, and LINE on Facebook's platform.

These internal discussions, now entered into evidence, form a central pillar of the FTC's case that Meta engaged in anticompetitive practices designed to neutralize threats before they could mature into serious challengers.

"We discussed various competitive responses to these platforms," Sandberg conceded, though she characterized the conversations as standard business strategy rather than evidence of monopolistic intent.

A former Meta executive who requested anonymity due to ongoing relationships with the company offered context: "Every tech platform monitors competitive threats and considers how to respond. The question isn't whether Meta tracked rivals—of course they did—but whether their responses crossed legal boundaries."

The courtroom fell silent as FTC attorneys displayed internal communications in which Sandberg described Google Plus as "real competition." She attempted to contextualize the remark, explaining it was meant to motivate her team rather than acknowledge Google as a serious threat to Meta's dominance.

The $1 Billion "Bargain": Instagram's Acquisition Under Scrutiny

Perhaps most telling was Sandberg's candid admission regarding Instagram, which Meta (then Facebook) acquired in 2012 for $1 billion—a sum that raised eyebrows at the time but is now widely considered one of the greatest bargains in corporate history.

"I initially thought the price was too high," Sandberg testified, her expression momentarily softening. "I was very wrong."

That acquisition, once celebrated on Wall Street as visionary, now stands at the center of the FTC's case. Government attorneys argue it exemplifies Meta's "buy-or-bury" strategy—eliminating competition by acquisition rather than innovation.

In the gallery, a group of tech industry analysts exchanged glances as Sandberg defended the acquisition's merits. "Instagram grew faster and became more valuable under our ownership than it would have independently," she insisted, a claim the FTC contests as both unprovable and irrelevant to the legal question of anticompetitive intent.

Financial data supports Instagram's explosive growth under Meta. From fewer than 30 million users at acquisition, the platform now contributes an estimated $67 billion in annual revenue to Meta's bottom line, according to industry projections for 2025.

"Instagram's success doesn't disprove anticompetitive behavior," explained an antitrust scholar observing the proceedings. "The FTC's argument is precisely that Instagram could have grown into a formidable competitor had it remained independent, forcing Facebook to innovate differently."

The TikTok Threat: Billions at Stake

Sandberg's testimony took a particularly interesting turn when addressing more recent competitive threats, particularly TikTok. By 2020, she revealed, Meta viewed the Chinese-owned short-form video platform as potentially siphoning $3–6 billion in advertising revenue from its business.

"Wall Street does not particularly favor any revenue misses, especially not those in the billions," Sandberg testified, explaining the pressure that drove Meta to invest over $500 million in developing Reels, its competing short-form video product.

This aspect of her testimony serves Meta's defense by highlighting the company's vulnerability to competitive forces—directly challenging the FTC's portrayal of Meta as an impenetrable monopoly. TikTok is projected to reach $32 billion in global ad revenue this year, representing significant market share that Meta executives argue undermines the monopoly claim.

Doug Peterson, a digital media analyst at Investment Capital Partners, noted: "The TikTok response shows two sides of the same coin. Yes, Meta felt threatened enough to invest half a billion dollars in Reels, but that same competitive response demonstrates they don't have the market locked up."

Breaking Up Is Hard to Do: The Stakes of Divestiture

As Sandberg's testimony concluded late Wednesday, the fundamental question hung in the courtroom air: What happens if the FTC prevails?

The trial, expected to last up to two months, could result in a court order forcing Meta to divest Instagram and WhatsApp—platforms that have become integral to its business model and account for a substantial portion of its $48.4 billion quarterly revenue.

"The irony is that a breakup might actually unlock shareholder value," observed a portfolio manager from a major institutional investor holding Meta shares. "Our sum-of-parts analysis suggests Instagram alone could command a $400 billion enterprise value as a standalone company, with WhatsApp potentially worth $80 billion."

This paradoxical outcome—where punishment becomes prize—hasn't escaped notice. Meta's stock has risen 25% year-to-date despite the regulatory overhang, with some investors betting that even in a worst-case scenario, the company's parts may be worth more than the whole.

The User Perspective: Divided Public Opinion

Beyond the courtroom and financial markets, Meta's users themselves remain divided on the merits of the FTC's case.

Some point to internal communications, like Zuckerberg's infamous emails about "neutralizing" competitors, as evidence that Meta's strategy harmed innovation. Others argue that both Instagram and WhatsApp improved substantially under Meta's ownership, gaining features and scale they might not have achieved independently.

"I remember Instagram before the acquisition—it was just filters and square photos," said Maya Keller, a digital content creator with over a million followers across Meta's platforms. "Now it's a full ecosystem for creators. Would that have happened without Meta's resources? Maybe, but probably not as quickly."

Privacy advocates take a different view. "The consolidation of data across platforms is what concerns many users," explained a representative from the Digital Privacy Coalition. "Breaking up Meta would create competition not just for users but for different approaches to data handling."

What's Next: A Legal Battle with Tech-Wide Implications

As the trial continues, upcoming testimony from Meta CEO Mark Zuckerberg will likely prove equally critical. The stakes extend beyond Meta itself, potentially setting precedents for how antitrust law applies to free digital services and two-sided markets where users pay with attention rather than dollars.

For advertisers, the trial's outcome could reshape the digital marketing landscape. Multiple bidding venues might emerge from a breakup, potentially lowering ad costs but degrading cross-platform targeting capabilities that many marketers have come to rely on.

The court is expected to issue a ruling by mid-July 2025, though appeals could extend the process well into 2027. In the meantime, Meta continues to forge ahead with ambitious AI investments, pouring billions into training models on user data—including a controversial recent decision to restart data collection in the EU despite strict privacy regulations.

"This regulatory brinkmanship shows Meta isn't backing down from its core strategy, trial or no trial," noted a technology policy expert at a Washington think tank. "They're betting that their AI investments will outrun regulatory constraints."

The Market's Verdict: Buy the Fear?

As Meta prepares to release its Q1 2025 financial results on April 30, investors are weighing competing scenarios. A status quo outcome, with the FTC losing its case, could see Meta shares reach approximately $520, according to analyst estimates. More intriguingly, a forced divestiture scenario might push the value to $600-650 per share as the sum of parts exceeds the current market capitalization.

The least likely outcome—some form of behavioral remedy or settlement that avoids divestiture—could see Meta implementing changes like mandatory API access for competitors or an optional ad-free tier for users.

Whatever the outcome, Meta's antitrust trial represents a pivotal moment not just for the company but for tech regulation broadly. As one investor put it: "This is high-stakes poker, but Meta's holding more aces than the market realizes."

For Sheryl Sandberg, whose career has been defined by building Meta's advertising empire, this week's testimony closes a chapter. For the company she helped build, however, the most consequential chapters may still lie ahead—whether as a unified tech giant or as separate entities forced to compete with one another.