[Host] In just over a decade, one man gained unprecedented control over how billions of us experience friendship, news, and community. Now, Mark Zuckerberg could lose it all. And that fear could be behind his most recent reinvention.
You look different when you walked in here today. You look thicker. You look like a different guy.
Good. Mark Zuckerberg is the ultimate chameleon. [Host] The question isn't how Mark Zuckerberg curries favor with our most powerful politicians.
Do you buy this latest reinvention of Mark Zuckerberg? [Whistleblower] It's whatever gets him closest to power. [Host] The question is why Mark Zuckerberg is trying to get so close to power this time.
What Zuckerberg wants from Donald Trump is simple— intervention in a historic trial that kicked off this spring. If Trump delivers, we all live with the consequences. [Media] The Federal Trade Commission alleges Zuckerberg's company illegally built a social networking monopoly.
[Media] A trial that could break up his social media empire. [Eric] This is how Mark Zuckerberg built his empire, how he's fighting to keep it, and whether laws written for the analog age can rein in digital platforms that are reshaping how we connect, what we believe, and who controls our attention. [Lina] I'm Lina Khan and until recently, I served as Chair of the Federal Trade Commission.
[Eric] As FTC chair in the Biden administration, Khan helped resurrect laws designed to protect society from business monopolies. She refiled a case originally brought by the first Trump administration, arguing Meta was a monopoly that should be broken up. So this case is important because it's taking aim at Facebook's illegal monopoly power and undoing that monopolization.
[Eric] Meta not only challenged the case, but challenged Khan herself, claiming her past academic work made her unfit. So I think for a certain class of companies and executives, they're offended when they realize that the laws and rules apply to them. [Eric] To understand why Meta is fighting this case with everything they've got, we need to understand how Zuckerberg got so rich in the first place.
The thing that we are trying to do at Facebook is just help people connect and communicate more efficiently. [Jason Koebler] In the early days, Facebook was a really cool website. [Eric] That's Jason Koebler.
He's been covering Meta for the last decade. He basically founded it as a hot-or-not website for women he thought were attractive at Harvard. This is pathetic.
Now, millions of students use thefacebook. com. [Jason] It was like this rite of passage where you would go to college, you would get access to a Facebook account.
[Eric] And when Facebook finally opened the platform to everyone, basically everyone joined. The Zuckerberg empire was built on a deceptively simple business model: Get people's attention by connecting them, collect their data and sell targeted ads. This is really like Facebook's special sauce— is that they know so much about their users that their ads are far more effective than the average online ad.
[News Reporter] Is there any concern you're turning Facebook into something much more commercial? I actually think that this makes it less commercial. I mean, what would you rather see a banner ad from Bloomingdales, or that one of your friends bought a scarf?
[Eric] By 2011, Meta told advertisers it controlled 95% of the social market. Zuckerberg was a star. On the cover of magazines, heralded as a new breed of leader.
He was worth $17 billion. But there was one big problem, and frankly, Zuckerberg saw it before most people. It was sitting there in people’s front pockets.
We think there are going to be several hundred thousand people lined up Friday night and Saturday morning just to have the first one, just for that cool factor. [Jason] Facebook came to power before smartphones existed. [Eric] Facebook was built for a world of digital cameras and dorm room keyboards.
Then, the iPhone arrived, putting all that in our pockets. [Commercial] There's an app for that. This left Zuckerberg's creation vulnerable to an army of upstart apps.
These types of technological transition moments end up being extra ordinarily important for innovation and for making sure that the existing incumbents are not suffocating and stifling the new upstarts that are bringing the real innovations to market, that are providing better services. [Eric] This might sound abstract, but we live with the result. Every notification, every endless scroll, wasn't inevitable— Facebook engineered it to mine your attention like a natural resource.
But there were other paths, ones that ultimately may have been prevented by Facebook's moves to control the market. During this transition, Facebook did have an app. [Jason] It's kind of a bloated mess.
[Eric] While Facebook struggled, a tiny startup with just 13 employees solved the exact problem Zuckerberg couldn't crack. Yeah, so, Instagram is great. [Eric] And it was growing like crazy.
[Zuckerberg] They just crossed 100 million registered users. I mean, they're killing it. [Jason] Facebook starts to think, like, how can we compete with Instagram?
But then Zuckerberg realizes that rather than compete, he can just buy Instagram. And so Facebook buys Instagram for $1 billion. [Eric] But Mark Zuckerberg was just getting started.
His next move started as the most expensive tech acquisition in history. It ended with two people walking away from over $1 billion, and Meta solidifying control over social media’s next evolution. Well, WhatsApp is a great company and it's a great fit for us.
Zuckerberg made WhatsApp’s founders an offer so large they couldn't refuse. $19 billion. That was almost double what their advisers thought the company was worth, for an app that wanted to charge people a dollar a year to use it.
But beneath the record breaking price tag lay fear. WhatsApp is the world's most popular messaging app at the time. Facebook realized that the user base that WhatsApp had and the growth that it was experiencing positioned it very uniquely to go toe to toe with Facebook.
The most engaging app that we've ever seen exist on mobile, by far. [Eric] Internally, the company called it a land grab and celebrated stopping the only company that could challenge them. In many ways, WhatsApp was Facebook's mirror opposite.
Facebook harvested data for profit. WhatsApp was focused on privacy. They collected no data and charged users a small fee.
There was no incentive to keep your eyes glued on the platform. [Lina] Once Facebook purchased WhatsApp, they initially made certain representations about how they would continue to honor privacy commitments. But then, within a few years, those were retracted.
As a result, the founders did something unthinkable in Silicon Valley. Rather than continue to work for Zuckerberg, they left the company. They walked away from over $1 billion in stock options.
Meanwhile, Meta kept marching on, sending Zuckerberg's net worth to $33 billion. But even he started to seemingly wonder about the legality of it all. Facebook decided that if it couldn't outcompete these companies, it would buy them, taking out the competition, and that violates the antitrust laws.
Meta argues that these were just great business moves. Instagram, once a rounding error now makes up over half of the company's U. S.
revenue. WhatsApp tripled its users. They basically cemented control of social media for a generation.
They also made Mark Zuckerberg incredibly rich. Zuckerberg's net worth exploded to $184 billion, and the FTC alleges that it was enabled by unfair competition. The government has Zuckerberg's own emails, clear motives, and a smoking gun.
Case closed, right? Not quite. [Lina] There's no such thing as an easy monopolization case anymore.
Courts have made it extraordinarily difficult to successfully bring antitrust cases. There are also huge resource asymmetries between an agency like the FTC and a company like Meta. So just looking at even the number of lawyers, that there are in the case, Meta can, you know, outdo the FTC by 1 to 10, at the very least.
Legal experts say this case hinges on a deceptively simple question: What market does Meta exactly control? [Lina] The FTC's argument is that the relevant market is the market for personal social networking services, which the FTC describes as social networks where you are primarily connecting with your friends and family. Facebook argues that the market is much broader than that— that their competition is more or less any app.
TikTok, Netflix— anything asking for your attention. While lawyers argue definitions in court, Zuckerberg, not known for his patience, is trying to make the courtroom irrelevant. When Obama was in power, he was very closely aligned with the left.
I'm the guy who got Mark to wear a jacket and tie. [Jason] After Facebook was blamed for the rise of Donald Trump in 2016, he went on this huge apology tour. After that didn't work to rehabilitate him, he cozied up really closely with Donald Trump.
[Zuckerberg] Pump his fist in the air with the American flag is one of the most badass things I've ever seen in my life. [Media] In recent months, Zuckerberg has been courting President Trump in hopes of settling this antitrust lawsuit. [Media] He's added UFC President Dana White, a close Trump ally, to his board.
He has dined at Mar-A-Lago. A $1 million donation to the inauguration fund, rolled back moderation and diversity policies. I don't think it's so much a political shift.
More so it's him trying to do what he believes is going to be keep his company away from being regulated. [Eric] He visited Trump at least three times. And so far, when it comes to this case specifically, it doesn't seem to be going over well.
It was reported that under Khan, the FTC proposed a $30 billion settlement with undisclosed terms. Meta's counter: $500 million. When Trump officials took over negotiations, they did cut the demand down to $18 billion.
Meta's counter: $1 billion or, 1/165 of the company's 2024 revenue. I wasn't surprised because Mark's playbook has been to try to buy his way out of accountability. And now, when faced with serious law enforcement, he wanted to basically buy out the enforcers through a very cheap settlement.
[Eric] The government wants to break the company up, unwind the acquisitions that transformed a college dropout into a digital emperor. That could have implications for all of us. What would it have looked like if it were not under the thumb of Mark Zuckerberg all of these years?
And if you want to keep in touch with your friends and families, you don't have to do it on a Mark Zuckerberg-owned platform. [Eric] Breaking up meta isn't some magical fix for society, but it would crack open the door that Zuckerberg has kept firmly shut, giving alternative social networks a chance. [Jason] There's dozens of other social media platforms that tried to become popular but never were able to get a foothold because Facebook already had that massive network effect.
So, what could the next generation of social media look like in a competitive market? I don't know. The only vision we're allowed to see right now is the one that Zuckerberg is desperate to sell us.
[Jason] Meta has spent billions and billions of dollars on this fantastical idea that we will all live, work, and play in this virtual world with our Oculus headsets on our faces. [AI Robot] Hey, are you coming? Yeah!
Just gotta find something to wear. [Zuckerberg] I think in the future we'll have AI coworkers. They wouldn't be able to be embodied.
I think we'll get to a point where, just like your friend can show up in a hologram, your AI colleagues will be able to also. [Eric] Zuckerberg is so certain about the metaverse, he renamed his entire company after it. But stripped of the jargon, it's the same business model: Capture your attention and sell it to advertisers— just with a headset or glasses strapped to your face.
[Jason] The metaverse has been a gigantic money pit and a huge flop. But now he's even more obsessed with the idea that AI is the future of everything. The average American, I think, has fewer than three friends.
And the average person has demand for meaningfully more. [Eric] It's going about as well as you'd expect. Somewhere, there are entrepreneurs dreaming of a different type of social network.
Competing on privacy, connection. If the government wins, they'll be given room to grow. That could be really bad news for the guy who started it all.
[Jason] If Mark Zuckerberg loses Instagram and WhatsApp, he's only got Facebook and his Metaverse project left. And that is a Mark Zuckerberg who is now in charge of an increasingly bloated and outdated product, who is a lot less powerful. And I think that that would actually be good for consumers.
