The role of intent as evidence
On the other hand, other types of evidence may not be enough to make an antitrust case.
The inquiry in a monopolization case is often framed as whether the monopolist enjoys its market position because it excluded rivals or because it made a better or cheaper product. The difficulty with using only objective market evidence to answer that question is that the evidence usually points in both directions.
Defendants can almost always identify some product improvement that came from their conduct, muddying the waters of the plaintiff’s story of exclusion. In the Facebook case, the company has pointed to Instagram’s growing user base and improved interface during its time under Facebook’s control.
So in most monopolization cases, courts get stuck if they try to use only market facts to answer the ultimate question: Did the monopolist flourish because of the improvements or because of diminished competition?
That’s where “intent evidence” – information about what a defendant was thinking – can help. If a CEO intended a merger to insulate her company from competition, it likely did in fact insulate the company from competition. Judges will attribute some of the company’s dominance to exclusion, and that violates the antitrust laws.
That’s why judges will turn to evidence of intent, especially if it is more than just economically ambiguous declarations of war against rivals.
Neutralizing competitors
Unfortunately for Facebook, Zuckerberg’s emails are explicit and detailed in describing his desire to avoid competing with Instagram and WhatsApp. The court will find that relevant – and possibly damning.
For example, in the months leading up to the acquisition, Facebook’s chief financial officer outlined three reasons for buying Instagram:
“1) neutralize a potential competitor?… 2) acquire talent?… 3) integrate their products with ours in order to improve our service?” Zuckerberg responded, “It’s a combination of (1) and (3).”
Zuckerberg goes on to explain Instagram’s competitive threat at length. By the time he gets to the product improvement explanation, he’s changed his mind. “(3) is also a factor, but in reality we already know [Instagram’s] social dynamics and we will integrate them in the next 12-24 months anyway.”
After the Microsoft case, many companies adopted communications policies that discourage the creation of documents just like these. Google, for one, circulates a five-point antitrust “communications safety” policy to employees.
What I find truly remarkable about this case is not the volume of internal quotes in the complaint, but the paper trail a sophisticated CEO like Zuckerberg created of Facebook’s transgressions – which is now why a federal antitrust lawsuit poses an existential threat to his company.