FTC v. Meta Trial Turns to Market Definition

WHAT’S NEXT IN ANTITRUST AND TECHNOLOGY REGULATION™

Market definition is a central issue in any antitrust case involving allegations of an illegal monopoly, and it was the first item on the agenda as week three of the trial in the Federal Trade Commission’s lawsuit against Meta Platforms got underway Monday.

Lawyers for the FTC called a series of witnesses to try to bolster the government’s contention that Meta operates in a distinct market for social networking and no longer has meaningful competition in that sector since its acquisitions of Instagram and WhatsApp. Meta has argued it is no longer only – or even mainly – a social networking platform, and that it faces an array of competitors such as TikTok and X (formerly Twitter).

On the witness stand, X VP of product Kevin Coleman, who led development of the platforms Community Notes feature that Meta has since copied, said Twitter choose to emphasize a different use case from Facebook’s focus on connecting with friends and family. X’s core use use-case, he said, according to The Verge’s live blog, is keeping up with and commenting on events in real time.

In a 2018 email from then-CEO Jack Dorsey in reply to a question from an employee asking whether Twitter “should serve personal social network (conversation among acquaintances)” in addition to facilitating public conversation on events, Dorsey responded, “Yes, but we have to pick one to optimize for. There’s already a service out there that does personal network well, so let’s focus on our strength of interest network.”

When challenged by Meta’s attorney about X’s description of itself in its own help center as “a “service for friends, family, and coworkers to communicate and stay connected through the exchange of quick, frequent messages,” Coleman claimed the description is outdated. “I don’t know who wrote that,” he said. “It’s pretty whacky.”

Related: Meta Lawyers Try to Undercut Instagram Co-Founder’s Damaging Testimony

The FTC also called former Strava VP of connected partnerships Mateo Ortega to try to distinguish Facebook and Instagram from other types of social network apps. Although Strava users can upload any type of content to the platform, Ortega described Strava as narrowly focused on personal fitness and sports. “It’s all about fitness,” he said. “While you can post other stuff, it just doesn’t seem as relevant.”

You won’t find baby pictures on Strava, Ortega added, unless the baby “in in a running stroller.”

Former Pinterest director of product management Julia Roberts similarly described that platforms as distinct from Facebook or Instagram. “When users come to Pinterest expecting it to be like other social media apps, they tend to be confused about how to use the product since people are not really forefront of the experience,” she testified.  “It just doesn’t set the right expectation if people have a mental model of another social media company when they come to Pinterest.”

On cross examination, however, Meta’s lawyer presented a 2017 internal competitive assessment by Pinterest warning that Instagram was “taking direct aim at our core turf,” and noting a “rapid increase in customer overlap” between the two apps.

Source: The Verge