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

The document, from February 2022, contains dialogues between several Meta executives about the strategic direction and market standing of Facebook and Instagram. In one particular exchange, Zuckerberg referred to Facebook as a "challenger" that had "forfeited its prominence and momentum," while also noting that TikTok cultivates a "sense of collective awareness" through friends sharing the same viral content.

Mosseri concurred that Facebook ought to be viewed as a rival presently, observing it is no longer the primary discovery mechanism. He suggested that YouTube might be the current favoured discovery engine, but he anticipated TikTok would eventually overtake the Google-owned video platform, based on the information Meta possessed.

Mosseri posited that Facebook's most intuitive differentiation strategy lay in becoming the primary discovery interface. However, he found it noteworthy that TikTok, a platform exclusively reliant on video, was significantly outperforming them. He speculated that TikTok was expanding the social mobile market while simultaneously encroaching upon the user bases of traditional television, long-form video content, and Netflix.

Evidence supports Mosseri's assertion that TikTok surpassed YouTube in average watch time in the U.S. during 2021, as indicated by one study. A separate analysis by the parental control software provider Qustodio revealed that children between the ages of four and 18 dedicated 60% more time to TikTok than YouTube in 2023. In a bid to compete with YouTube, TikTok initiated support for 60-minute uploads last year.

Merely this week, Netflix launched its proprietary TikTok-esque feature within its mobile application, providing a novel vertical video stream of suggested content, tailored to the individual user.

However, during the trial, the U.S. government is seeking to demonstrate that Meta contravened competition legislation through the acquisition of companies such as Instagram and WhatsApp, thereby establishing a social networking monopoly. A document of this nature could potentially prejudice the case, considering that, within Meta, executives were discussing the significant challenge posed to Facebook by TikTok.

For instance, Zuckerberg observed that while Facebook might retain its position as the most popular app based on daily or weekly user engagement, it had been surpassed in terms of time spent by users.

He further asserted that TikTok fosters a sense of shared context, explaining that common interests among users often lead to discovering similar content within the platform's feed.

The CEO explained that this makes it naturally social because instead of sending content to a friend, you can just assume they've seen it. He added that it would be great if they could reach this level with different topics and unrelated content on Facebook.

Several other executives also voiced their perspectives on the matter.

WhatsApp head Will Cathcart noted that TikTok users' ability to comment on videos within a specific niche could prompt the algorithm to repeatedly expose those users and other commenters to similar videos.

Stan Chudnovsky, formerly a Vice President and General Manager at Meta, observed that Meta had entered a highly fragmented market where numerous competitors were eroding their growth.

Adding a new format, like we did with Stories, is not enough anymore. People have many other places to go online, he added, mentioning other popular social apps in the U.S. like TikTok, Twitter, iMessage, Snap, YouTube, Reddit, and Discord.

John Hegeman, then the Vice President of advertising (now the chief revenue officer), conceded that TikTok held a clear advantage in domains such as short-form video, ranking algorithms, and creator tools, yet expressed confidence that Meta could narrow the gap by encouraging creators to share content on Reels as well.

However, he expressed greater uncertainty regarding Meta's standing in machine learning, technical expertise, and content creation tools. The document portrays Facebook as an underdog in the social media landscape from Meta's perspective.

This is not the only document that has come out during the trial showing that Meta is afraid of competition. Zuckerberg himself said last month that TikTok doing well was a risk to Meta's business and had made it grow slower.