#333;">Why one obscure app could help crumble Metaâs empire
If the question, âWho is Metaâs biggest rival?â were on a Family Feud survey, TikTok would likely be the winning answer.
In the Federal Trade Commissionâs antitrust case against the Facebook and Instagram owner, the governmentâs response probably wouldnât even make the top 10: a small blockchain-based platform called MeWe.
MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain â which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency.
The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, âWho are these people?â I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short.
I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely theyâre the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if youâre not steeped in antitrust law or the specifics of the FTCâs complaint.
Meta CEO Zuckerberg testified he hadnât even heard of the app before this case was filed.
But the FTC has spent the past three weeks laying out its logic.
Using Metaâs own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online â and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case â if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services â whatâs known as a relevant market.
The FTC says that here, that market is âpersonal social networking services,â or PSNs: spaces where a core purpose is helping people connect with friends and family.
While there are many online platforms that overlap with Metaâs services, the FTC argues that virtually none of them serve that market.
If internet users want to find and hang out with people they know â as opposed to, say, watching influencers or making work connections â then itâs Mark Zuckerbergâs way or⊠in the governmentâs telling, Snapchat, BeReal, and MeWe.
Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of usersâ friends and family connections, as opposed to mapping users primarily based on their interests.
Users can look up and find people they know in real life.
And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service.
It used Instagram chief Adam Mosseriâs testimony to most clearly make this point.
In that testimony as well as posts to his own Instagram account, Mosseri said that itâs still important for the app to connect users with their friends.
The FTC argues that even if that use case is a smaller portion of what Metaâs apps do these days, itâs still a significant need users have that can virtually only be fulfilled by Facebook and Instagram.
While someone might connect with people they know in real life on LinkedIn, they likely wonât primarily share personal updates there.
And while they also could follow and interact with people they know on TikTok or YouTube, theyâre more likely to passively watch videos from people they donât.Meta says this is an entirely wrong way to think about it.
Social media platforms compete for usersâ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point.
Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated.
The company has already landed some important points that could help its case, and it will get more time to push back on the agencyâs framing when it calls its own witnesses in the coming weeks.But as the FTCâs case-in-chief continues into its fifth week, its argument for Metaâs dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular companyâs product? A lot of goods and services compete with each other in some sense, but this doesnât mean they serve the same niche.
In the case of sodas, for example, âyou could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,â says George Washington Law professor and former FTC Chair Bill Kovacic.
In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep â but those comparisons probably wouldnât stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a usersâ desire to broadcast personal updates with friends and family online.
To make its case, it brought in a string of executives from other social media companies to explain why their apps canât quite scratch the same itch for users.
Stravaâs former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldnât unless it was in a running stroller.
âItâs all about fitness, and while you can post other stuff, it just doesnât seem as relevant,â he said.
âYou could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or PepsiâPinterestâs former head of user growth Julia Roberts testified that users who come to Pinterest âexpecting it to be like other social media apps ⊠tend to be confused about how to use the product.â Thatâs because the app is so much not about connecting with other people that it works much differently from other social media platforms.
Pinterest is more about finding things users are interested in, she said, so âfollowing is not a big part of the Pinterest experience.âTikTok has a tab where users can watch videos from their friends â identified as people who mutually follow each other.
But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there.
The company doesnât think of itself as competing with Metaâs apps for personal social networking, he testified.
And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, âwhen you click out of this view for these other platforms, you would get to essentially what I think of as their core business,â which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Metaâs cross-examination of rival company executives showed the limits of appsâ similarities.
When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Appleâs messaging feature could serve as a social media feed for friends and family sharing.
But Shah testified that feed would be limited to 32 people at most, and users canât just look up each othersâ profiles like they would on social platforms.
Still, Meta pointed out, Appleâs messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTCâs framing.
It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Metaâs were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations.
It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level.
Thatâs because, Meta argued, competition for users is really about winning their time and attention.Companies can âsometimes make mistakes.
They misjudge who their users areâBut X VP of product Keith Coleman testified itâs not that useful to think about competition this way.
Instead, âitâs much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.â Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and usersâ interests, Coleman testified, because thatâs why people were coming to the platform.
Coleman was later surprised at how his own website characterized the product in its help center as a âservice for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.â âI canât believe thatâs on the website,â he said.
âThatâs pretty wacky.âThis point was âa caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,â Kovacic said.
Companies can âsometimes make mistakes.
They misjudge who their users are.âThere are real ramifications for internet users here.
Going back to Netflixâs comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead.
But others would be frustrated that they couldnât watch a movie, which is why itâs good that Hulu, HBO, and Amazon Prime Video also exist.
The FTCâs argument isnât that Meta owns the only social apps on the internet, itâs that the company faces little competition for a service many people specifically want â so the fact that you probably donât know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasbergâs market definition â whether itâs Metaâs, the FTCâs, or his own â will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic.
âNotice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,â he says.
âDoes the story in the courtroom match the story of your own internal documents?â So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder.
In September 2020, Meta told its board that Instagram revenue would be âmeaningfully lowerâ than planned in the second half of the fiscal year because TikTok was drawing usersâ attention.
But other internal documents have shown Metaâs well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space.
In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to âsee daily casual momentsâ and âsee special moments.â By contrast, users came to Twitterâs feed for news and YouTubeâs for entertainment.
And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to âsee photos and videos from your friends.ââInstagram will always need to focus on friendsâIn a 2018 email, Zuckerberg told Mosseri that âInstagram will always need to focus on friends.â And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, âfriends are an important part of the experience.â Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figureâs post counts as an interaction between friends â and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok.
But the FTC says itâs still significant enough to monopolize.
Itâs a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v.
Microsoft.
In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldnât truly lock up the computing ecosystem as much as the government alleged.âJudge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,â Kovacic says.Still, he adds, a market niche can at some point become so small that itâs no longer significant in the eyes of antitrust law.
âYou can have a process of change that ultimately renders the market segment unimportant,â he says.
âAnd the hard task of analysis for the judge is to say, has it already happened?âSee More:
Why one obscure app could help crumble Metaâs empire
If the question, âWho is Metaâs biggest rival?â were on a Family Feud survey, TikTok would likely be the winning answer.
In the Federal Trade Commissionâs antitrust case against the Facebook and Instagram owner, the governmentâs response probably wouldnât even make the top 10: a small blockchain-based platform called MeWe.
MeWe looks a fair amount like Facebook at first glance, except that you make an account using the Frequency blockchain â which the company explains is a decentralized protocol that lets you move your social connections to other (mostly hypothetical at this point) apps that support Frequency.
The company says 20 million users have joined, but when I make a MeWe account and log in, I scroll through my autopopulated feed and think, âWho are these people?â I search for a few of my Verge colleagues, figuring if anyone has tried this obscure app, it might be one of them, but I come up short.
I try some public figures: Tim Cook? Jeff Bezos? Mark Zuckerberg? There are some accounts with these names, but it seems unlikely theyâre the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if youâre not steeped in antitrust law or the specifics of the FTCâs complaint.
Meta CEO Zuckerberg testified he hadnât even heard of the app before this case was filed.
But the FTC has spent the past three weeks laying out its logic.
Using Metaâs own internal discussions about how it views itself and its competition, it says that Meta has historically, and to this day, competed in a market for connecting with friends and family online â and when it saw its dominance in that space threatened by the rise of Instagram and WhatsApp, it bought them to squash the competition.Whether Judge James Boasberg buys this could determine who wins the case â if the FTC can also show that Meta acted illegally through its acquisitions of Instagram and WhatsApp to solidify its alleged monopoly power.Antitrust law is supposed to ensure fair competition, which usually means that people have options for a useful class of goods and services â whatâs known as a relevant market.
The FTC says that here, that market is âpersonal social networking services,â or PSNs: spaces where a core purpose is helping people connect with friends and family.
While there are many online platforms that overlap with Metaâs services, the FTC argues that virtually none of them serve that market.
If internet users want to find and hang out with people they know â as opposed to, say, watching influencers or making work connections â then itâs Mark Zuckerbergâs way or⊠in the governmentâs telling, Snapchat, BeReal, and MeWe.
Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of usersâ friends and family connections, as opposed to mapping users primarily based on their interests.
Users can look up and find people they know in real life.
And they come to the app to share personal updates with those people.Facebook and Instagram increasingly display videos and photos from influencers and celebrities, but the FTC argues personal social networking remains a core service.
It used Instagram chief Adam Mosseriâs testimony to most clearly make this point.
In that testimony as well as posts to his own Instagram account, Mosseri said that itâs still important for the app to connect users with their friends.
The FTC argues that even if that use case is a smaller portion of what Metaâs apps do these days, itâs still a significant need users have that can virtually only be fulfilled by Facebook and Instagram.
While someone might connect with people they know in real life on LinkedIn, they likely wonât primarily share personal updates there.
And while they also could follow and interact with people they know on TikTok or YouTube, theyâre more likely to passively watch videos from people they donât.Meta says this is an entirely wrong way to think about it.
Social media platforms compete for usersâ time and attention, so whether a particular app is squarely aimed at so-called friends and family sharing is beside the point.
Facebook and Instagram have evolved to show more content from people like influencers, shifting further from the use case the FTC says Meta has illegally dominated.
The company has already landed some important points that could help its case, and it will get more time to push back on the agencyâs framing when it calls its own witnesses in the coming weeks.But as the FTCâs case-in-chief continues into its fifth week, its argument for Metaâs dominance is becoming a lot clearer.Why do people use Facebook?When defining a market, each side is trying to answer a key question: why are people choosing one particular companyâs product? A lot of goods and services compete with each other in some sense, but this doesnât mean they serve the same niche.
In the case of sodas, for example, âyou could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,â says George Washington Law professor and former FTC Chair Bill Kovacic.
In the tech world, Netflix has claimed its biggest competitors are Fortnite and sleep â but those comparisons probably wouldnât stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a usersâ desire to broadcast personal updates with friends and family online.
To make its case, it brought in a string of executives from other social media companies to explain why their apps canât quite scratch the same itch for users.
Stravaâs former VP of connected partnerships Mateo Ortega testified that sure, users of the fitness-tracking social media app could share baby photos on the platform, but they probably wouldnât unless it was in a running stroller.
âItâs all about fitness, and while you can post other stuff, it just doesnât seem as relevant,â he said.
âYou could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or PepsiâPinterestâs former head of user growth Julia Roberts testified that users who come to Pinterest âexpecting it to be like other social media apps ⊠tend to be confused about how to use the product.â Thatâs because the app is so much not about connecting with other people that it works much differently from other social media platforms.
Pinterest is more about finding things users are interested in, she said, so âfollowing is not a big part of the Pinterest experience.âTikTok has a tab where users can watch videos from their friends â identified as people who mutually follow each other.
But head of operations Adam Presser testified only about 1 percent of videos watched on the platform are there.
The company doesnât think of itself as competing with Metaâs apps for personal social networking, he testified.
And even though side-by-side screenshots of TikTok, Instagram Reels, and YouTube Shorts look identical, Presser said, âwhen you click out of this view for these other platforms, you would get to essentially what I think of as their core business,â which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Metaâs cross-examination of rival company executives showed the limits of appsâ similarities.
When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Appleâs messaging feature could serve as a social media feed for friends and family sharing.
But Shah testified that feed would be limited to 32 people at most, and users canât just look up each othersâ profiles like they would on social platforms.
Still, Meta pointed out, Appleâs messages app is listed under social media on its own app store.However, Meta also made important arguments about why the judge should question the FTCâs framing.
It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Metaâs were submitted to foreign officials to try to avoid getting drafted into potentially frustrating regulations.
It also pointed out when TikTok briefly went dark in the US ahead of a (now-aborted) ban, users flocked to Meta apps, showing consumers see it as a substitute on at least some level.
Thatâs because, Meta argued, competition for users is really about winning their time and attention.Companies can âsometimes make mistakes.
They misjudge who their users areâBut X VP of product Keith Coleman testified itâs not that useful to think about competition this way.
Instead, âitâs much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.â Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and usersâ interests, Coleman testified, because thatâs why people were coming to the platform.
Coleman was later surprised at how his own website characterized the product in its help center as a âservice for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.â âI canât believe thatâs on the website,â he said.
âThatâs pretty wacky.âThis point was âa caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,â Kovacic said.
Companies can âsometimes make mistakes.
They misjudge who their users are.âThere are real ramifications for internet users here.
Going back to Netflixâs comparisons, if the streaming video service went down, some people would probably be happy to play a video game or get a few hours of shut-eye instead.
But others would be frustrated that they couldnât watch a movie, which is why itâs good that Hulu, HBO, and Amazon Prime Video also exist.
The FTCâs argument isnât that Meta owns the only social apps on the internet, itâs that the company faces little competition for a service many people specifically want â so the fact that you probably donât know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasbergâs market definition â whether itâs Metaâs, the FTCâs, or his own â will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic.
âNotice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,â he says.
âDoes the story in the courtroom match the story of your own internal documents?â So far, the documents have shown that Meta has clocked that at least some portion of users come to its products to connect with family and friends, but also that the rise of TikTok has had it looking over its shoulder.
In September 2020, Meta told its board that Instagram revenue would be âmeaningfully lowerâ than planned in the second half of the fiscal year because TikTok was drawing usersâ attention.
But other internal documents have shown Metaâs well aware that at different points in time, users have come to its apps to connect with family and friends, and worriedly took note of other apps entering that space.
In a 2018 presentation, Meta found that the highest percentage of surveyed users said they come to Facebook, Instagram, and Snap to âsee daily casual momentsâ and âsee special moments.â By contrast, users came to Twitterâs feed for news and YouTubeâs for entertainment.
And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to âsee photos and videos from your friends.ââInstagram will always need to focus on friendsâIn a 2018 email, Zuckerberg told Mosseri that âInstagram will always need to focus on friends.â And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, âfriends are an important part of the experience.â Even though users may share fewer of their own updates on Facebook and Instagram, Mosseri admitted that two friends talking in the comments of a public figureâs post counts as an interaction between friends â and one that Instagram actively tries to facilitate.Meta has argued that this special focus on friends and family sharing makes up a shrinking portion of its offerings as it works to compete with fierce rivals like TikTok.
But the FTC says itâs still significant enough to monopolize.
Itâs a scenario that came up in another major tech monopolization case, Kovacic says: the late-1990s lawsuit US v.
Microsoft.
In that case, Microsoft argued the Justice Department was ignoring how computing would soon move beyond the personal computer to the Internet of Things, meaning it couldnât truly lock up the computing ecosystem as much as the government alleged.âJudge Jackson in the Microsoft case said, yeah, those things are happening, but not happening fast enough to deny you real market power in this PC and laptop-based market that the Justice Department is emphasizing,â Kovacic says.Still, he adds, a market niche can at some point become so small that itâs no longer significant in the eyes of antitrust law.
âYou can have a process of change that ultimately renders the market segment unimportant,â he says.
âAnd the hard task of analysis for the judge is to say, has it already happened?âSee More:
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