According to a recent filing in the U.S. Federal Trade Commission’s antitrust lawsuit against Meta, CEO Mark Zuckerberg, Instagram head Adam Mosseri, and other Meta executives believed TikTok was outperforming Meta in its core business.

Dating from February 2022, the document contains discussions between several Meta executives regarding Facebook and Instagram's strategic approach and standing in the market. Within one message, Zuckerberg characterised Facebook as a "challenger" that has "lost its influence and momentum," while suggesting that TikTok cultivates a "sense of shared context" through friends encountering the same memes.

Mosseri agreed that Facebook is now more of a competitor, saying it's not the main way people find things anymore. He thought YouTube might be the main way now, but he expected TikTok to become more popular than YouTube later, based on the information Meta had.

Mosseri posited that Facebook's most intuitive strategy for achieving differentiation is to serve as the primary platform for content discovery, yet he found it noteworthy that TikTok, being exclusively video-based, was significantly outperforming them. He speculated that TikTok's growth stems from expanding the social mobile market and concurrently encroaching upon areas traditionally held by television, extended video formats, and services like Netflix.

Mosseri's prediction proved accurate, as a 2021 study revealed TikTok surpassed YouTube in average watch time within the U.S. Furthermore, research conducted by the parental control software provider Qustodio indicated that young people between the ages of four and eighteen dedicated 60% more time to TikTok compared to YouTube in 2023. In an evident move to compete with YouTube, TikTok introduced the capacity for uploads extending up to 60 minutes last year.

Only this week, Netflix debuted its proprietary TikTok-esque functionality within its mobile application, providing a novel vertical video compilation of suggested videos, uniquely tailored to each user.

However, in the trial, the U.S. government is trying to show that Meta broke competition laws by buying companies like Instagram and WhatsApp to create a social networking monopoly. A document like this could hurt the case because, inside the company, Meta executives were talking about how badly Facebook was losing to TikTok.

For example, Zuckerberg pointed out that while Facebook might still be the most used application based on daily or weekly interaction, it was no longer dominant in terms of time commitment.

He also posited that TikTok fosters a feeling of shared context, suggesting that individuals with congruent interests are likely to encounter similar content within their feeds.

This makes it naturally social because you can just assume your friends have seen the content instead of having to send it to them," the CEO said. "It would be great if we could reach this level with different topics and unrelated content on Facebook."

Other executives also interjected their perspectives.

Will Cathcart, the head of WhatsApp, indicated that the algorithm tends to connect TikTok users who comment on videos within the same niche, bringing them and other commenters to similar content over time.

Stan Chudnovsky, then serving as a Vice President and General Manager at Meta, noted that Meta had now started to contend within a market sector that had grown considerably fractured, with numerous companies eroding their expansion.

"The introduction of a new format, as with our previous implementation of Stories, no longer suffices, primarily because users have numerous alternative platforms available to them," he explained, referencing various prevalent social media applications in the U.S., including TikTok, Twitter, iMessage, Snap, YouTube, Reddit, and Discord.

John Hegeman, who was then the VP of ads and is now chief revenue officer, acknowledged that TikTok held a distinct advantage in areas such as short-form video content, ranking algorithms, and creation tools, but suggested that Meta could bridge the disparity by persuading creators to cross-post on Reels.

He expressed less certainty, however, about the extent to which Meta lagged technically in machine learning and creation tools. According to the document, Meta perceives Facebook as an underdog in the social media landscape.

Also, this isn't the only document shown during the trial that proves Meta is afraid of competition. Last month, Zuckerberg himself said that TikTok's success was a danger to Meta's business and had made it grow more slowly.