The government’s case may hinge on whether the judge views MeWe as a closer competitor to Instagram than TikTok.
If asked, “Who is Meta’s biggest rival?” many would likely answer TikTok. However, in the Federal Trade Commission’s antitrust case against Meta, the government’s response might surprisingly include MeWe, a small blockchain-based platform.
At first glance, MeWe resembles Facebook, allowing users to create accounts using the Frequency blockchain, which facilitates moving social connections to various apps. The company claims to have 20 million users, but upon creating an account, I found my feed populated with unfamiliar names. I searched for colleagues and public figures like Tim Cook and Jeff Bezos, but could not find verified accounts.
The assertion that MeWe competes with Facebook and Instagram more closely than TikTok may seem perplexing if you’re not familiar with antitrust law or the FTC’s specific arguments. Meta CEO Mark Zuckerberg testified he had never heard of MeWe before the case. Nevertheless, the FTC has spent weeks presenting its rationale, citing Meta’s internal discussions about its competition. The agency argues that Meta has historically competed in the market for connecting with friends and family online, acquiring Instagram and WhatsApp to eliminate competition.
Judge James Boasberg’s assessment of this argument could determine the case’s outcome, particularly if the FTC can demonstrate that Meta’s acquisitions were illegal and solidified its monopoly.
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Antitrust law aims to ensure fair competition, which typically means consumers have various options for goods and services, referred to as a relevant market. The FTC defines this market as “personal social networking services” (PSNs), emphasizing that while many platforms overlap with Meta’s offerings, few fulfill the specific need for personal social connections.
The FTC contends that despite the rise of other platforms, only apps like Snapchat and MeWe adequately meet users’ desires to share personal updates with friends and family online. To bolster its case, the FTC brought executives from various social media companies to explain why their platforms do not serve the same purpose. For example, a former VP from Strava noted that while users could share personal updates, the platform primarily focuses on fitness.
TikTok, although it has a feature for viewing friends’ videos, does not consider itself a competitor in personal social networking, according to its operations head. Despite visual similarities to Meta’s platforms, TikTok operates differently, as it emphasizes content consumption rather than personal interaction.
Meta’s cross-examination of competing executives revealed the limitations of other apps. For instance, Apple’s messaging feature has a limited group chat capacity, making it less viable for extensive social networking.
However, Meta also presented arguments questioning the FTC’s framing. It highlighted that some rival companies previously characterized their platforms as distinct from Meta’s to avoid regulatory scrutiny. Additionally, during a temporary TikTok outage in the U.S., users migrated to Meta’s apps, indicating that consumers view them as substitutes.
Ultimately, the judge’s market definition will depend on how Meta perceives itself, how competitors view it, and his own insights. The FTC’s thorough questioning of Meta witnesses based on internal documents suggests a strong focus on understanding how users engage with Meta’s products.
While some internal documents indicate that users seek connections with friends and family through Meta’s platforms, others reveal concerns about competition from TikTok. Even as Meta evolves, it still recognizes the importance of social connections, as reflected in statements from Instagram’s leadership.
The FTC argues that personal social networking remains significant, even as Meta shifts its focus to compete with platforms like TikTok. This situation parallels historical antitrust cases, where market relevance is crucial in determining dominance.
The judge’s challenge will be to ascertain whether the market segment in question has diminished in significance over time, determining the fate of the case.
SOURCE: THE VERGE
