Meta Executives Acknowledged Facebook's Loss to TikTok

Meta Executives Acknowledged TikTok's Competitive Threat

According to a recently published filing related to the U.S. Federal Trade Commission’s antitrust lawsuit, Meta CEO Mark Zuckerberg, Instagram’s Adam Mosseri, and other leading figures within the company recognized TikTok as a significant competitor.

Internal Discussions Reveal Concerns

A document from February 2022 details conversations among Meta executives concerning the strategic direction and market standing of Facebook and Instagram. Zuckerberg reportedly described Facebook as a “challenger” that had experienced a decline in both influence and momentum.

He further observed that TikTok fostered a “feeling of shared context,” enabling users to encounter the same viral content and memes amongst their friend groups.

Shifting Landscape of Social Media Discovery

Adam Mosseri concurred with this assessment, stating that Facebook was no longer the primary platform for content discovery. He suggested that YouTube currently held that position, but anticipated TikTok would eventually surpass it, based on Meta’s internal data analysis.

Mosseri articulated that Facebook’s natural differentiation should be as the leading discovery platform, but acknowledged TikTok’s dominance in the video format. He wrote, “TikTok is 100% video and beating us badly.”

TikTok's Rapid Growth and Impact

Mosseri’s predictions proved accurate. Data indicated that TikTok surpassed YouTube in average U.S. watch time in 2021. A study by Qustodio revealed that children aged four to eighteen spent 60% more time on TikTok than on YouTube in 2023.

Furthermore, TikTok introduced the capability to upload videos up to 60 minutes in length last year, directly challenging YouTube’s established position.

Netflix Adapts to the Changing Trends

Responding to this evolving landscape, Netflix recently integrated a TikTok-inspired vertical video feed within its mobile application, offering users personalized video recommendations.

Implications for the FTC Antitrust Lawsuit

This document could potentially weaken the U.S. government’s case, which aims to demonstrate that Meta engaged in anti-competitive practices through acquisitions of companies like Instagram and WhatsApp, thereby establishing a social networking monopoly.

The internal discussions reveal that Meta executives were acutely aware of the challenges posed by TikTok’s growing popularity.

Focus on Time Spent vs. User Numbers

Zuckerberg noted that while Facebook maintained a large user base, it was losing ground in terms of the amount of time users spent on the platform.

He emphasized TikTok’s ability to create a shared experience, where users naturally encounter the same content without needing to share it directly. He stated, “If we could get to a level like this with topics and unconnected content on FB, that would be great.”

Algorithm and Fragmentation of the Social Space

WhatsApp’s Head, Will Cathcart, highlighted how TikTok’s algorithm connects users through shared interests, leading them to discover similar videos and engage with the same communities.

Stan Chudnovsky, then a VP and GM at Meta, observed that Meta was now competing in a fragmented market with numerous companies impacting their growth. He added, “Just adding a new format… is not enough anymore.”

Reels as a Potential Countermeasure

John Hegeman, then VP of ads (now chief revenue officer), acknowledged TikTok’s lead in short-form video, content ranking, and creation tools. He believed Meta could regain ground by encouraging creators to utilize Reels.

However, he expressed uncertainty regarding Meta’s standing in machine learning and the development of creation tools.

Meta's Perception of Itself as an Underdog

The document portrays Meta’s internal view of Facebook as the underdog in the current social media market.

This isn’t the only evidence to emerge from the trial indicating Meta’s concerns about competition. Zuckerberg testified last month that TikTok’s success represented both a risk to Meta’s business and a hindrance to its growth.

Key Players: Mark Zuckerberg, Adam Mosseri, Will Cathcart, Stan Chudnovsky, John Hegeman
Competing Platforms: TikTok, YouTube, Netflix, Twitter, iMessage, Snap, Reddit, Discord
Core Issue: Meta’s market dominance and potential anti-competitive practices