On this day a decade ago, Instagram became part of Facebook. The deal epitomized the red-hot mobile startup moment: Apple and Google’s app stores catapulted the photo-sharing service into a global phenomenon, and Facebook CEO Mark Zuckerberg, facing up to his earlier failures to capitalize on smartphones, agreed to spend $1 billion on a company with 13 employees, 19 shareholders and 30 million users.

The deal is now at the heart of an antitrust lawsuit the Federal Trade Commission filed in 2020, which argues that Facebook identified nascent threats like Instagram and WhatsApp and bought them up rather than trying to compete with them. “It’s better to buy than compete,” Zuckerberg wrote in a 2008 email.

Letting Facebook buy Instagram seems like a huge mistake in retrospect. But hindsight is 20/20.

• For a billion-dollar deal, the Instagram purchase moved quickly. Facebook announced the blockbuster deal in April. By late August, the FTC closed its antitrust review, taking no action but reserving the right to do so in the future.
• A week after that, Instagram co-founder Kevin Systrom was sitting in an office in San Francisco testifying to the deal’s fairness to California officials. Because Instagram was so small and all its shareholders were in California, Facebook could use an expedited state review. California advertises the process as a “fast and cost-efficient alternative to federal registration,” not a deep or thorough one, and it only considers whether a transaction is “fair, just and equitable to the parties” involved, not its effect on the broader public.
• Questions later arose about Systrom’s testimony — chiefly, whether Instagram had other offers, which he claimed it hadn’t. Twitter executives quietly groused to reporters that they had presented him with a $525 million bid. Nothing happened, though.

Buying a small fry is a classic Big Tech strategy. Antitrust enforcers are historically ill-equipped to block these kinds of deals.

• Since the Reagan administration, antitrust enforcers have largely focused only on consumer harm. Since Facebook and Instagram both offer free apps, it’s hard to show the acquisition made users financially worse off.
• Under chair Lina Khan, the FTC is trying to look more broadly at harms to competition.
• And other regulators are restraining Zuckerberg’s company, now known as Meta: The U.K.’s Competition and Markets Authority ordered it last fall to sell Giphy.

It isn’t just that Facebook took out a potential competitor a decade ago: Meta now wields Instagram as a club against the likes of Snap and TikTok.

• Those who remember Instagram as an artsy photo app complain about what Meta has done to Instagram along the way.
• But the real question is how an independent Instagram might have competed not just with those upstarts but with Facebook’s big blue app. The answer might not please social media nostalgics.

It’s impossible to wind the clock back, but it is good to remember what things were like in 2012. Back then, Facebook was scared by a startup. Perhaps regulators don’t need to resurrect the Instagram that was; maybe they need to make room for what the next Instagram might be instead.

— Owen Thomas