Facebook documents offer treasure for Washington’s antitrust war

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Haugen’s revelations, along with his role in a series of Wall Street Journal investigative articles and appearances in a recent “60 Minute” interview and Senate hearing, sparked Facebook’s most serious political crisis for years, while potentially adding momentum to congressional efforts. to strengthen antitrust enforcement against US-based tech giants.

Disclosures related to Facebook’s competitive landscape could also help the Federal Trade Commission antitrust lawsuit launched against the company last year, which seeks to force it out of Instagram and the WhatsApp messaging app. The FTC has struggled in court to define the key elements of the case, including what a social network is and how Facebook dominates that market. The new documents could help the agency close these gaps.

Facebook’s public documents with the SEC offer fewer details about its users than its internal documents, including data broken down by age groups. Facebook also doesn’t publicly provide disaggregated data for WhatsApp and Instagram, but these documents do.

“This is very, very strong support for the basic story underlying the FTC case,” said a former agency staff member who reviewed the documents for POLITICO and spoke under cover of ‘anonymity. to avoid influencing the agency’s litigation. “There is much to regret in these documents if you are Facebook.

But in court documents filed this month, the company accused the FTC of choosing data to present Facebook as a monopoly abusing its power. The government’s claims, Facebook lawyers wrote, are “a fiction based on litigation at odds with the business reality of intense competition with burgeoning rivals like TikTok.”

And the documents provided by Haugen only support Facebook’s argument, company spokesman Christopher Sgro said in an interview on Friday.

“Far from supporting the government’s case, the documents presented to Facebook strongly reinforce what Facebook has always said: We compete with a wide range of services for people’s time and attention, including apps that deliver services. social, community, video, news and messaging features, ”Sgro told POLITICO.“ Consumers freely switch between these features – both inside and outside of Facebook – and defining the market. The FTC’s artificially narrow ignores this obvious reality. “

Facebook users are ‘hard to lose’

An estimated 162 million American adults over the age of 30 use the social network each month, or 78% of that population, according to a March 2021 presentation created for Facebook product manager Chris Cox. Just about all 18 to 29 year olds in the United States also use Facebook, they said.

In total, Facebook has 174 million daily active users in the United States, according to internal data. By comparison, Google-owned YouTube has 122 million, while Snapchat has 87.3 million and TikTok has 50 million, according to publicly available estimates. Globally, Facebook has over 2.7 billion users.

While fewer American teens use Facebook’s main social network, almost all use Instagram; the company has estimated that 22 million American teens use the service. Instagram also achieved the same high usage rate among those under 35 in France, Great Britain and Australia.

Once users register they rarely leave, another presentation found.

“Social apps often stop growing but rarely shrink,” the study concluded based on data from nearly a dozen apps, including Facebook, Twitter, Snap, South Korean messaging app Kakao and Japanese LINE messaging app. “Once you have a user on your app, it’s hard to lose them. “

Facebook’s enormous reach is at the heart of the FTC’s lawsuit, which alleges that Facebook has a monopoly on “personal social networking services” – online services with a common social space for nurturing relationships and sharing experiences with friends, family and acquaintances.

Facebook and Instagram are “the digital equivalent of a town square,” FTC CEO Mark Zuckerberg said in a public posting to Facebook, while a messaging service like WhatsApp is “the digital equivalent of [a] salon. ”The lawsuit accused Facebook of engaging in a“ buy or bury ”strategy to crush the competition, citing its $ 1 billion purchase of Instagram as one of transactions in 2012.


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