http://feedproxy.google.com/~r/DrudgeReportFeed/~3/aWqRU9pBCmc/facebook-market-dominance-whistleblower-516918

Facebook likes to portray itself as a social media giant under siege — locked in fierce competition with rivals like YouTube, TikTok and Snapchat, and far from the all-powerful goliath that government antitrust enforcers portray.

But internal documents show that the company knows it dominates the arenas it considers central to its fortunes.

Previously unpublished reports and presentations collected by Facebook whistleblower Frances Haugen show in granular detail how the world’s largest social network views its power in the market, at a moment when it faces growing pressure from governments in the U.S., Europe and elsewhere. The documents portray Facebook employees touting its dominance in their internal presentations — contradicting the company’s own public assertions and providing potential fuel for antitrust authorities and lawmakers scrutinizing the social network’s sway over the market.

The internal metrics show that 78 percent of American adults and nearly all U.S. teenagers use the company’s services— and that while competitors like TikTok and Snap have made inroads with 13- to 17-year-olds, they lag behind Facebook and its photo app Instagram on core values like sharing and community.

“We do not have the number-one product for all use cases in all markets,” the employees wrote in one newly obtained presentation from 2018, which said “Facebook-the-company” was doing “okay” but not yet “great” with teens worldwide. “But we do have one of the top social products — with growing market share — almost everywhere.”

Facebook’s goal, employees said in a 2021 presentation, is to be a “super app” that consumers use for everything from sharing life moments with friends and building community to reading the news and watching entertaining videos.

The records are among a pile of disclosures that Haugen’s legal counsel has made to the Securities and Exchange Commission and provided in redacted form to Congress. A consortium of news organizations, including POLITICO, has obtained the redacted versions of thousands of documents.

About the Facebook Papers

POLITICO and 16 other American news organizations are publishing stories based on the Facebook Papers — internal documents taken by whistleblower Frances Haugen before leaving the company.

The Facebook Papers include company research, internal message board threads, emails, project memos, strategy plans and presentations that Haugen captured by snapping photos of her computer screen.

The disclosures were submitted to the Securities and Exchange Commission and provided to Congress in redacted form by Haugen’s legal counsel. The consortium of media outlets has reviewed the redacted versions received by Congress, documents that black out the names of many lower-level employees. The documents were previously obtained by The Wall Street Journal, but our coverage provides new revelations from the files.

The group of media outlets coordinated on an embargo date of Monday to ensure enough time for reporters to review thousands of documents. This collection does not include all the files Haugen captured, and POLITICO expects to publish further stories as more documents become available.

Haugen’s disclosures, along with her role in a series of Wall Street Journal investigative articles and her appearances in a recent “60 Minutes” interview and Senate hearing, have set off Facebook’s most serious political crisis in years, while potentially adding momentum to efforts in Congress to toughen antitrust enforcement against U.S.-based tech giants.

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

Facebook’s public filings to the SEC offer less detail on its users than its internal documents provide, including data broken down by age groups. Facebook also does not publicly provide data broken down for WhatsApp and Instagram — but these documents do.

“This is very, very strong support for the core story underneath” the FTC’s case, said a former agency staffer who reviewed the documents for POLITICO and spoke on condition of anonymity to avoid influencing the agency’s litigation. “There’s a lot to regret in these documents if you are Facebook.”

But in court papers filed this month, the company accused the FTC of cherry-picking data to portray Facebook as a monopoly abusing its power. The government’s claims, Facebook’s lawyers wrote, are “a litigation-driven fiction at odds with the commercial reality of intense competition with surging rivals like TikTok.”

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

“Far from supporting the government’s case, the documents presented to Facebook firmly reinforce what Facebook has always said: We compete with a broad range of services for people’s time and attention, including apps that offer social, community, video, news and messaging features,” Sgro told POLITICO. “Consumers freely switch among these features — both within Facebook and outside it — and the FTC’s artificially narrow market definition ignores this obvious reality.”

Facebook’s users are ‘hard to lose’

An estimated 162 million U.S. adults over age 30 use the social network each month, or 78 percent of that population, according to a March 2021 presentation created for Facebook’s Chief Product Officer Chris Cox. Just about all 18- to 29-year-olds in the U.S. also use Facebook, they said.

All told, Facebook has 174 million daily active users in the U.S., according to the 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. Worldwide, Facebook has more than 2.7 billion users.

While fewer U.S. teens use Facebook’s main social network, nearly all of them use Instagram; the company estimated that 22 million American teens use the service. Instagram also has reached that same high rate of usage with the under-35 crowd in France, Great Britain and Australia.

Once users sign up, they rarely leave, another presentation found.

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

Facebook’s enormous reach is central to the FTC’s suit, which alleges that Facebook holds a monopoly on “personal social networking services” — online services with a joint social space to maintain relationships and share experiences with friends, family and acquaintances.

Facebook and Instagram are “the digital equivalent of a town square,” the FTC quoted CEO Mark Zuckerberg as saying in a public Facebook post, while a messaging service like WhatsApp is “the digital equivalent of [a] living room.” The suit accused Facebook of engaging in “buy or bury” strategy for crushing the competition, citing among deals its $1 billion purchase of Instagram in 2012.

You Might Like
Learn more about RevenueStripe...