Facebook Says its Competitors Are the Whole Internet, Because Facebook Is the Internet
Facebook told Congress that its competitors come from all over the internet—that's true, because Facebook has largely replaced the internet for many of its users.
When Mark Zuckerberg testified before Congress in April, prompted by the Cambridge Analytica data scandal, Facebook’s CEO promised to give written answers to dozens of questions from lawmakers.
Tuesday, those responses—totaling hundreds of pages—were published by the Senate Committee on Commerce, Science, & Transportation. Much of what Facebook said was boilerplate policy-speak, and the company often linked to its own guidelines and recycled answers when confronted with questions about data collection, GDPR, and the role of artificial intelligence on its platform.
But several lawmakers also probed Facebook about who its competitors are—intended to make the company reckon with whether or not it’s a monopoly.
“At what point,” wrote Alaska’s Senator Sullivan, “from an antitrust perspective, is Facebook simply too big?”
In its written response, Facebook said:
In Silicon Valley and around the world, new social apps are emerging all the time. The average American uses eight different apps to communicate with their friends and stay in touch with people. There is a lot of choice, innovation, and activity in this space, with new competitors arising all the time. Facebook’s top priority and core service is to build useful and engaging products that enable people to connect, discover and share through mobile devices and personal computers. Given its broad product offerings, Facebook faces numerous competitors, competing to attract, engage, and retain users, to attract and retain marketers, and to attract and retain developers who build compelling mobile and web applications. For instance, if you want to share a photo or video, you can choose between Facebook, DailyMotion, Snapchat, YouTube, Flickr, Twitter, Vimeo, Google Photos and Pinterest among many other services. Similarly, if you are looking to message someone, just to name a few, there’s Apple’s iMessage, Telegram, Skype, Line, Viber, WeChat, Snapchat and LinkedIn—as well as the traditional text messaging services your mobile phone carrier provides. Equally, companies also have more options than ever when it comes to advertising—from billboards, print and broadcast, to newer platforms like Facebook, Spotify, Twitter, Google, YouTube, Amazon, or Snapchat. Facebook represents a small part (in fact, just 6%) of this $650 billion global advertising ecosystem and much of that has been achieved by helping small businesses—many of whom could never have previously afforded newspaper or TV ads—to cost-effectively reach a wider audience.
When Zuckerberg was asked this question in April, he avoided answering it head on. First he listed Google, Apple, Amazon, and Microsoft, and then broke the notion of “competitor” down into categories.
Together, Facebook’s swath of competitors is the internet to the average American, and probably to citizens of other countries as well (especially in places where it's tried to launch Free Basics.) As I’ve previously written, Facebook accomplished this by historically cloning or acquiring its competitors, making the service irreplaceable to millions of consumers. In 2013, it paid $150 million for Onavo, which allowed the company to monitor user activity and see which features they liked best.
I understand what Facebook is trying to do (“Look at all of our rivals!”), but it doesn’t seem so diminutive when comparing itself to (virtually) every popular network out there. And on any other day, Zuckerberg would be touting Facebook’s ubiquitousness. “I always thought one day someone would connect the whole world, but I never thought it would be us,” he told the crowd at last year’s Facebook Community Summit.
In nearly every space—photo sharing, mobile gaming, video streaming—Facebook has products that look like a competitor’s. And okay fair, I guess “new social apps are emerging all the time.” But it doesn’t mean shit if Facebook can swallow them up with its sheer size.