In a remarkably short span of less than 48 hours, Threads, the Twitter competitor from Meta, has achieved an astonishing milestone of over 70 million sign-ups, completely transforming the social media landscape. The meteoric rise of this new app has evidently unsettled Twitter to the point where they are contemplating legal action against Meta.
While the influx of users flocking to Threads indicates a clear desire to escape the tumultuous environment of Elon Musk’s Twitter, the unprecedented success of Meta’s app raises fresh concerns. Meta has long faced criticism for its dominant market position and accusations of stifling competition through imitation and elimination of rival applications. Now, industry experts and even some Threads users are apprehensive that the app’s continued traction could further consolidate power and dominance for Meta, along with its CEO Mark Zuckerberg.
“One can’t help but worry about the potential monopoly by Meta. It’s a genuine societal issue when a handful of individuals and companies control every aspect of our lives, leaving no room for alternative paradigms that they don’t appropriate right from the beginning,” expressed one user. Another echoed the sentiment, emphasizing the need for diversity in ownership and paradigms.
While Twitter has always been smaller compared to Meta’s platforms, it wielded significant influence in the realms of technology, media, and politics. However, as Twitter faltered under Musk’s leadership, a cottage industry of smaller apps emerged, each vying to capture a fragment of Twitter’s magic. Among them, Threads appears to be the frontrunner to claim the throne.
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The Phenomenal Power of Instagram
The astounding success of Threads is not only a testament to the dissatisfaction with Musk’s stewardship of Twitter but also a reflection of the unparalleled power and reach of one of Meta’s prized possessions: Instagram.
With a user base exceeding two billion, Instagram dwarfs Twitter’s reported 238 million users before Musk’s tenure. When users sign up for Threads, which requires an Instagram account, the app prompts them to effortlessly connect with all their existing Instagram contacts with just a single tap. While optional, declining this prompt requires a deliberate decision.
By leveraging the integration with Instagram and sharing user data between the platforms, Meta has significantly smoothened the onboarding process for Threads. This frictionless experience has successfully overcome the common challenge known as the “cold start” problem, where new platforms struggle to attract users due to the absence of an existing user base to engage them.
The elimination of this hurdle through Instagram integration has left a positive impression on venture investor Alexis Ohanian, co-founder of Reddit. In a video posted on Threads, Ohanian expressed his optimism, stating, “With the way they tackled the biggest challenge right from the start—the chicken-egg problem—I am bullish on this new app.”
Competition Concerns
However, the same innovative approach that facilitated rapid user acquisition may give rise to competition concerns, particularly in Europe, where new antitrust regulations for digital platforms will come into effect in the coming months.
Agustin Reyna, director of legal and economic affairs at the Brussels-based consumer advocacy organization BEUC, highlighted the potential problems from a competition perspective. “Meta could exploit this integration to leverage its market power and erect barriers to entry, as rival platforms wouldn’t have the same customer base via Instagram,” he explained.
Under the EU’s Digital Markets Act (DMA), which specifically addresses antitrust concerns raised by large tech platforms, “digital gatekeepers” like Meta and its subsidiaries will be prohibited from combining a user’s data across multiple platforms without consent. Additionally, they will be barred from mandating users to sign up for one platform as a prerequisite for using another.
In an interview with The Verge, Instagram CEO Adam Mosseri seemed to acknowledge these issues. He mentioned that Threads would not be launched in the EU for now due to “complexities in complying with some of the forthcoming laws.” It is widely speculated that he was referring to the DMA.
The DMA aims to protect competition in the digital market and Threads’ current inability to comply with the regulations underscores the uncertainty surrounding the app’s potential impact on competition.
Resurrecting Copycat Concerns
Meta’s approach to Threads also resurrects long-standing allegations of the company copying and extinguishing competitors, particularly in light of Twitter’s threat to sue Meta for trade secret theft (a claim Meta denies).
The issue extends beyond the realm of social media. As the race to develop artificial intelligence intensifies, Threads presents a significant opportunity for Meta to gather training data for its own AI technology, potentially bringing it on par with industry leaders such as OpenAI and Google. This aspect further complicates a comprehensive analysis of Threads’ implications for competition in the tech sector.
Uncertainty for Advertisers and Users
Threads poses a genuine challenge to Twitter, adding pressure on the platform to enhance its services. This can be seen as healthy competition between apps, according to Geoffrey Manne, founder of the International Center for Law and Economics in Portland, Oregon.
However, Manne also points out that if Threads contributes to a concentration of power within the social media industry as a whole, it may ultimately reduce competition. The outcome depends on how one defines the market.
To gain clarity, Manne suggests looking at the issue from the perspective of the advertising market rather than the social media market. If and when Threads introduces advertising (which Zuckerberg has indicated will happen once the app attains significant scale), it may strengthen Meta’s position in the advertising sector. Consequently, this could invite further antitrust scrutiny for Meta, regardless of the ambiguities surrounding social media competition.
Former DOJ antitrust official Jeff Blattner believes that having Threads as a rival to Twitter can only benefit consumers. In a Threads post, he wrote, “Having two platforms run by eccentric billionaires is better than having just one.” However, if Threads becomes so successful that it effectively supplants Twitter, the question regarding Meta’s dominance will persist.
An Olive Branch
Threads possesses one crucial element that could allay competition concerns: a commitment to integrate with open protocols used by other decentralized social media alternatives like Mastodon.
This would grant users the ability to migrate their accounts, along with their complete follower data, to an alternative platform like Mastodon that is not controlled by Meta.
Although interoperability is not currently available, Mosseri has repeatedly emphasized its significance and inclusion on his agenda.
If and when it becomes a reality, this could be a significant step forward. What might seem like a simple audience acquisition tactic by Meta today could eventually pave the way for millions of users to onboard a massive, decentralized social networking infrastructure that remains independent of any single company, individual, or organization.
Charlotte Slaiman, a competition expert at the consumer group Public Knowledge, underscores the importance of interoperability requirements. She suggests that if users could seamlessly migrate their entire social graph from one rival platform to another whenever they desired, it would foster fair competition based on product quality rather than incumbent advantages.
In conclusion, the astonishing rise of Threads within a mere 48 hours has left an indelible impact on the social media landscape. However, the consequences of this disruption remain uncertain, and concerns regarding Meta’s dominance and potential antitrust implications persist. The integration with Instagram has undoubtedly contributed to Threads’ success, but it also raises questions about competition, especially in light of forthcoming regulations in Europe. As Threads continues to gain momentum, only time will reveal the true extent of its influence on advertisers, users, and the broader social media ecosystem.
