#333;">Why one obscure app could help crumble Meta’s empire
If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer.
In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t 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 — 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, “Who are these people?” 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 they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint.
Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed.
But the FTC has spent the past three weeks laying out its logic.
Using Meta’s 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 — 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 — 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 — what’s known as a relevant market.
The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family.
While there are many online platforms that overlap with Meta’s 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 — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe.
Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ 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 Mosseri’s testimony to most clearly make this point.
In that testimony as well as posts to his own Instagram account, Mosseri said that it’s 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 Meta’s apps do these days, it’s 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 won’t primarily share personal updates there.
And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it.
Social media platforms compete for users’ 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 agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s 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 company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche.
In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” 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 — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ 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 can’t quite scratch the same itch for users.
Strava’s 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 wouldn’t unless it was in a running stroller.
“It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said.
“You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s 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 “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — 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 doesn’t think of itself as competing with Meta’s 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, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities.
When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s 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 can’t just look up each others’ profiles like they would on social platforms.
Still, Meta pointed out, Apple’s 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 FTC’s framing.
It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s 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.
That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes.
They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way.
Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s 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 “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said.
“That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said.
Companies can “sometimes make mistakes.
They misjudge who their users are.”There are real ramifications for internet users here.
Going back to Netflix’s 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 couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist.
The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic.
”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says.
“Does the story in the courtroom match the story of your own internal documents?” 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 “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention.
But other internal documents have shown Meta’s 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 “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment.
And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” 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 figure’s post counts as an interaction between friends — 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 it’s still significant enough to monopolize.
It’s 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 couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge 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,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law.
“You can have a process of change that ultimately renders the market segment unimportant,” he says.
“And the hard task of analysis for the judge is to say, has it already happened?”See More:
Why one obscure app could help crumble Meta’s empire
If the question, “Who is Meta’s biggest rival?” were on a Family Feud survey, TikTok would likely be the winning answer.
In the Federal Trade Commission’s antitrust case against the Facebook and Instagram owner, the government’s response probably wouldn’t 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 — 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, “Who are these people?” 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 they’re the ones I have in mind.The claim that MeWe is a closer competitor to Facebook and Instagram than TikTok might be baffling if you’re not steeped in antitrust law or the specifics of the FTC’s complaint.
Meta CEO Zuckerberg testified he hadn’t even heard of the app before this case was filed.
But the FTC has spent the past three weeks laying out its logic.
Using Meta’s 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 — 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 — 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 — what’s known as a relevant market.
The FTC says that here, that market is “personal social networking services,” or PSNs: spaces where a core purpose is helping people connect with friends and family.
While there are many online platforms that overlap with Meta’s 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 — as opposed to, say, watching influencers or making work connections — then it’s Mark Zuckerberg’s way or… in the government’s telling, Snapchat, BeReal, and MeWe.
Beyond that core definition, PSNs have some other unique features and norms: The apps feature a social graph of users’ 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 Mosseri’s testimony to most clearly make this point.
In that testimony as well as posts to his own Instagram account, Mosseri said that it’s 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 Meta’s apps do these days, it’s 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 won’t primarily share personal updates there.
And while they also could follow and interact with people they know on TikTok or YouTube, they’re more likely to passively watch videos from people they don’t.Meta says this is an entirely wrong way to think about it.
Social media platforms compete for users’ 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 agency’s framing when it calls its own witnesses in the coming weeks.But as the FTC’s case-in-chief continues into its fifth week, its argument for Meta’s 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 company’s product? A lot of goods and services compete with each other in some sense, but this doesn’t mean they serve the same niche.
In the case of sodas, for example, “you could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi,” 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 — but those comparisons probably wouldn’t stand up in court.The FTC says that outside of Facebook and Instagram, only apps like Snapchat and MeWe can fulfill a users’ 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 can’t quite scratch the same itch for users.
Strava’s 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 wouldn’t unless it was in a running stroller.
“It’s all about fitness, and while you can post other stuff, it just doesn’t seem as relevant,” he said.
“You could buy lemon-lime, but many people would never see that as a close substitute for buying Coke or Pepsi”Pinterest’s former head of user growth Julia Roberts testified that users who come to Pinterest “expecting it to be like other social media apps … tend to be confused about how to use the product.” That’s 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 “following is not a big part of the Pinterest experience.”TikTok has a tab where users can watch videos from their friends — 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 doesn’t think of itself as competing with Meta’s 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, “when you click out of this view for these other platforms, you would get to essentially what I think of as their core business,” which for Instagram, includes a feed and stories that often contain at least some content from family and friends.At times, Meta’s cross-examination of rival company executives showed the limits of apps’ similarities.
When questioning Apple director of product marketing Ronak Shah, Meta sought to show that group chats in Apple’s 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 can’t just look up each others’ profiles like they would on social platforms.
Still, Meta pointed out, Apple’s 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 FTC’s framing.
It pointed out that some documents from TikTok and YouTube owner Google claiming their products are very different from Meta’s 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.
That’s because, Meta argued, competition for users is really about winning their time and attention.Companies can “sometimes make mistakes.
They misjudge who their users are”But X VP of product Keith Coleman testified it’s not that useful to think about competition this way.
Instead, “it’s much more helpful to understand what people are trying to accomplish in their lives and to try to help them accomplish that.” Under former CEO Jack Dorsey, then-Twitter leaned into focusing on news and users’ interests, Coleman testified, because that’s 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 “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages.” “I can’t believe that’s on the website,” he said.
“That’s pretty wacky.”This point was “a caution that not everything a company writes down or says is necessarily decisive in establishing what the boundary of a market is,” Kovacic said.
Companies can “sometimes make mistakes.
They misjudge who their users are.”There are real ramifications for internet users here.
Going back to Netflix’s 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 couldn’t watch a movie, which is why it’s good that Hulu, HBO, and Amazon Prime Video also exist.
The FTC’s argument isn’t that Meta owns the only social apps on the internet, it’s that the company faces little competition for a service many people specifically want — so the fact that you probably don’t know anyone using MeWe is sort of the point.How will the judge decide?Ultimately, Boasberg’s market definition — whether it’s Meta’s, the FTC’s, or his own — will come down to a few things: how Meta views itself, how competitors see it, and his own intuition, says Kovacic.
”Notice how much the FTC has been questioning Meta witnesses on the basis of its own internal documents,” he says.
“Does the story in the courtroom match the story of your own internal documents?” 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 “meaningfully lower” than planned in the second half of the fiscal year because TikTok was drawing users’ attention.
But other internal documents have shown Meta’s 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 “see daily casual moments” and “see special moments.” By contrast, users came to Twitter’s feed for news and YouTube’s for entertainment.
And even as Instagram expands into entertainment, the FTC notes that it still advertises its sign-up page as a place to “see photos and videos from your friends.”“Instagram will always need to focus on friends”In a 2018 email, Zuckerberg told Mosseri that “Instagram will always need to focus on friends.” And even though a lot has changed in the social media landscape since then, Mosseri testified that to this day on the app, “friends are an important part of the experience.” 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 figure’s post counts as an interaction between friends — 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 it’s still significant enough to monopolize.
It’s 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 couldn’t truly lock up the computing ecosystem as much as the government alleged.“Judge 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,” Kovacic says.Still, he adds, a market niche can at some point become so small that it’s no longer significant in the eyes of antitrust law.
“You can have a process of change that ultimately renders the market segment unimportant,” he says.
“And the hard task of analysis for the judge is to say, has it already happened?”See More:
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