Former TikTok director of UX research Eric Morrison testifies in a short video deposition that as of 2022, unlike Facebook and Instagram, TikTok “was not necessarily serving that need to connect to people that you already know.” This is the need that the FTC says Facebook and Instagram uniquely fill, alongside the smaller apps Snapchat and MeWe.
Hegeman concedes that even with TikTok becoming a more significant competitor in the past two years, Facebook’s user base and the time users spend on it have continued to grow.
Hegeman says that the (not publicly disclosed) number of users who opted out of off-app tracking through Apple’s App Tracking Transparency policy mostly reflects Apple’s scare tactics in framing the question to users, rather than whether users actually prefer not to share their data with Meta. He adds that Apple frames the ask very differently when asking users about similar opt-ins for its own products. “I think it’s a clear example of them trying to leverage their position controlling the iOS operating system to advantage their position in the market,” he says.
Sometime after 2018, Meta realized that focusing on surfacing friends and family content wasn’t helping it as much as it had hoped. Competitors like TikTok were taking over a lot of time users would spend online, and Hegeman says Meta found it to be a better strategy to broaden the focus of the Facebook app to include investments in video and other kinds of content.
In 2021, Meta found that by reducing the relative amount of ads some groups saw by 80 percent, it only saw about a 3 percent increase of a usage metric. This shows ads aren’t a major cost for consumers, Hegeman says, because if a company like Apple lowered the price of its iPhone by 80 percent, it would likely see much more than a 3 percent increase in sales.
In response to regulations in the EU, Meta began offering an ad-free version of its products there for 6 Euros a month. But that offering hasn’t caught on, Hegeman says — just about 0.007 percent of users opted to pay for the service.
Meta found when it tested a new system to customize how many ads it shows based on how much a user likes or dislikes them, users didn’t seem to know the difference. The time they spent on the platforms and engaged on it didn’t change much. “This change had a minimal impact on people’s experience and was not very noticeable,” Hegeman says.
The FTC is asking Meta about Apple’s 2021 App Tracking Transparency policy that let users decide whether to let developers track their activity off-app to help serve more persoanlized ads. Meta warned investors in 2022 that it would result in a $10 billion revenue hit to its business that year. That’s presumably because when users are given an option to give Facebook and Instagram less data, at least a significant chunk of them take it. We don’t know exactly how many, though, since the judge sealed the courtroom to discuss internal metrics like how many people opted into the tracking.
That’s theme of the FTC’s questioning of Meta’s CRO. The FTC’s Stephen Pearson is asking about what Meta says it collects in its privacy policy, and points out that if Instagram were independent, it would have its own policy. Meta uses this data to fuel personalized advertising, which makes money for the company. Pearson is also beginning to touch on ad load — or the relative amount of ads to organic posts users see in their feed — which the FTC has tried to show Meta can increase with relatively little risk of losing users.