Total failure at Meta showed which services really serve as alternatives
The EU checked if internet services like Facebook really dominate some markets and face competition. A creative investigation explored the truth of this claim.
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A total shutdown of Facebook, Instagram and WhatsApp in October 2021 and the reaction of users has made it clear that the European Union's definition of competition for such online services falls short. At least that's what a research team from the ZEW – Leibniz Centre for European Economic Research in Mannheim says. It investigated what people did during the outage and what alternatives they looked at. According to the study, the services of the Meta Group were also replaced by offers from other providers that cannot be classified in the same categories. The usual market definitions should therefore be critically scrutinized.
Competition from other market segments
By investigating the reaction to the total failure of meta services, the research group says it has examined two fundamental assumptions of the Digital Markets Act (DMA) using a specific case study. One relates to data compatibility and portability. Both are intended to make it easier to move accounts from one service to another without losing all data. The second assumption is that online services each cover a specific market and are only in direct competition with similar offerings. This was investigated using extensive data sets for the USA and Spain, which were obtained from volunteers who had their mobile device usage recorded.
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The research group found that many users switched to other online services during the outage. In particular, people who already had accounts on Twitter or were already using the messenger and WhatsApp competitor Telegram simply switched there. This underlines how important it is to support people in being at home on multiple platforms. At the same time, however, it has also been shown that people have not simply switched from one messenger to another, but from the meta services to the video platform YouTube, for example. It is therefore in competition with them, even if it belongs to a completely different market for the EU.
Overall, the published study confirms that social networks and messengers from other providers were the biggest competitors for the failed meta services. However, the reaction to the outage differed depending on the age group and there were also differences between countries. For example, people in Spain switched more to streaming services and traditional communication services such as email or even telephones. Overall, the study makes it clear "that uniform market definitions along common service categories fall short both within and between countries," says co-author Sebastian Valet. This needs to be given greater consideration in regulation.
(mho)
