Pew Research Center Study Contradicts Federal Trade Commission’s Cases Against Meta

By Mark Jamison of AEI.

"This headline from Pew Research Center should be enough to give the Federal Trade Commission (FTC) pause and maybe even lead the agency to reverse course in its proceedings against Facebook’s parent Meta:

TikTok has established itself as one of the top online platforms for U.S. teens, while the share of teens who use Facebook has fallen sharply.

Since December 2020, the FTC has filed multiple complaints against Meta, calling it a “monopoly,” “the world’s dominant online social network,” a “behemoth,” and an “empire.” The FTC’s beliefs about Meta’s power have led the agency to consider breaking up the company and attempt to stop a planned acquisition. Now comes Pew with data showing that the FTC’s beliefs are clearly false.

According to Pew, the social media leader among US teens age 13–17 is YouTube, with 95 percent saying they use the service. Second is TikTok, with 67 percent of US teens saying they use it. These are impressive numbers, but even more impressive is the market shift they represent. Pew’s 2015 study on US teens and social media didn’t even include TikTok or YouTube. TikTok was missing because it didn’t exist: TikTok didn’t launch in the US until 2018, so it went from zero to 67 percent in five years. And YouTube was considered so inconsequential for teens in 2015 that Pew didn’t even ask about it.

Facebook, the service that made Meta great, is performing dismally according to Pew. Its popularity among US teens (measured by numbers of teens who say they use the social media service) dropped from 71 percent in 2015 to just 32 percent in 2022, ranking 5th behind Meta’s Instagram product (62 percent) and Snapchat (59 percent). If this rate of fall persists, look for Facebook to be below Twitter and Reddit soon—and perhaps dead to US teens by 2030. So much for being a monopolistic empire or “the world’s dominant online social network.”

According to the Wall Street Journal, competition is causing Facebook’s fall. I have tended to agree. Cold Wire shows how TikTok differentiated itself from legacy social media services and attracted teens by demonstrating the value of short videos, founding new ways to give users continuous dopamine shots, paying royalties for certain content, and developing industry-leading artificial intelligence. Meta, Alphabet, and other legacy tech companies lacked these abilities and are scrambling to imitate TikTok.

Of course, US teens age 13–17 do not constitute the only demographic that matters for social media, but they do make up about 8 percent of the US population. This age group is also important to advertisers, from whom social media companies make their money.

US teens’ growing interest in Meta’s rivals clearly demonstrates that Meta lacks market power. Market power is present only if competitive pressure is absent. Meta’s losses of audience to rivals, its decisions to adopt some TikTok-like practices, and its extensive investment in the future of the metaverse show the company is feeling and responding to competitive pressure and losing some of the battles.

What should the FTC do? To my knowledge, the FTC hasn’t commented on the Pew study. But it is hard to legitimately argue that a company is a monopoly when it is rapidly losing customers to rivals. My advice would be for the FTC to have a “Gilda Radner moment” by looking again at the agency’s court filings, comparing them to what is really going on in the markets, and saying “never mind.”"