Lauren Feiner

Acton reinforces a notion we’ve heard about the WhatsApp founders throughout trial: that they had absolutely no interest in building an ad-supported product or a social media feed. He testifies he wanted to focus on building the communications product and limiting distractions. “We had no ambition to build Facebook-like functionality like a feed,” he testifies. That’s why he wrote this infamous note in the early days of WhatsApp as a reminder of its guiding principles.

Before Meta bought it, WhatsApp was moving toward a model where users would pay $1 per year for the messaging service after a free first year. Though the company was cashflow positive in early 2014, WhatsApp didn’t spend money on marketing in the US, since the wide availability of cheap or free messaging there at the time would have made it a “waste of money,” Acton says.

That’s the message from Meta’s next witness, Catherine Tucker, an MIT management and marketing professor with expertise in digital monetization strategies. Tucker argues it’s important to account for this kind of competition because it’s the crux of how Meta makes money.

Government attorney Mitchell London points out that List’s “natural experiment” about how consumers behaved when India banned TikTok leaves out some potentially important context. He notes that 58 other apps, including popular messaging and social app WeChat, were banned alongside TikTok — meaning there were fewer alternative apps for consumers to turn to. List says TikTok made up the vast majority of usage prior to the app bans. But London also points to a Meta document that says, “In emerging markets, especially India, Facebook often serves a completely different purpose.”

On cross examination, the FTC interrogates List’s finding that Google Chrome is the top app users go to when they’re incentivized to spend less time on Facebook. List says he didn’t focus on the app as much as YouTube and TikTok since “it’s a little like off-device time has an infinite number of things you can do.” The FTC seems to be suggesting that this is exactly the point — and why evaluating Facebook’s relevant competitors based on where users shift their time is an imperfect measure.

Had the two never merged, List testifies that each company would have likely given in more to advertiser demand for more ads, not less, as the FTC has claimed. He says that over the long run, advertiser-side incentives would win out over incentivizing user engagement if the two remained separate, since one platform couldn’t recoup lower revenue from the other. He claims this is “the direct opposite result” from what the FTC’s expert found.

List uses the “natural experiment” that booted 200 million TikTok users from the app to argue that consumers see it as a fitting substitute for Meta’s apps. Within about two weeks of the ban, he says, Facebook and Instagram saw 20 percent increases in time spent on their apps. This means, according to his analysis, that TikTok should be considered a relevant competitor to Meta.

In List’s experiment, Instagram users who were incentivized to reduce their usage of the app diverted their time to YouTube more than other apps he tracked. The video app saw an 18.9 percent diversion rate, while Snapchat, which the FTC says Instagram directly competes with, sees a 2.2 percent diversion rate. Facebook users incentivized to lower their usage diverted the greatest share of their time to Google Chrome at a rate of 9.3 percent.

List makes this argument using a pricing experiment he ran where he paid a treatment group $4 for each hour they reduced their usage of Facebook and Instagram. The FTC has argued these apps have unique features that users greatly value to help them connect with friends and family. But List found that participants decreased their usage of Facebook and Instagram’s friends and family features about as much as all its other features – showing users don’t particularly value those features more than other ones the apps have to offer.