Threads Surpasses 70 Million Sign-Ups, Sparks Legal Threats from Twitter
Meta’s new social media platform, Threads, has made a remarkable impact in less than 48 hours, attracting over 70 million sign-ups. This sudden success has upended the social media landscape and even led Twitter to consider legal action against Meta. However, as Threads gains traction, concerns are emerging about Meta’s increasing market dominance and potential monopoly, fueling worries among competition experts and users alike.
The Power of Instagram Propels Threads to Success
Threads’ rapid rise can be attributed to user dissatisfaction with Elon Musk’s ownership of Twitter and the influential role played by one of Meta’s key properties, Instagram. With over two billion users, Instagram far surpasses Twitter’s user base. Threads leverages this advantage by prompting users to follow their existing Instagram contacts with a single tap during the onboarding process. This seamless integration effectively addresses the common challenge faced by new platforms known as the “cold start” problem. By solving this hurdle, Threads has gained momentum and garnered optimism from industry experts.
Competition Concerns and Antitrust Implications
Despite Threads’ initial success, there are concerns, particularly in Europe, where new antitrust rules for digital platforms are soon to be enforced. Meta’s ability to leverage Instagram’s user base and combine data from multiple platforms raises competition concerns. The forthcoming Digital Markets Act (DMA) in the European Union prohibits such practices and imposes restrictions on mandatory platform sign-ups. Instagram CEO Adam Mosseri has hinted at these complexities and the app’s delayed launch in the EU, likely due to compliance issues with the DMA. Meta’s historical practices of copying and eliminating competitors could also face renewed scrutiny, especially as Twitter warns of potential legal action.
Uncertain Impact on Advertisers and Users
The rise of Threads presents a complex scenario in terms of competition. While it may pressure Twitter to improve its services, it could also consolidate power within the social media industry, potentially reducing overall competition. Assessing the impact through the lens of the advertising market, Threads could reinforce Meta’s advertising market power, inviting further antitrust scrutiny. Former DOJ antitrust official Jeff Blattner suggests that having Threads as a rival to Twitter benefits consumers, but if Threads were to surpass Twitter entirely, concerns about Meta’s dominance would persist.
An Olive Branch for Interoperability
Threads offers the possibility of integrating with open protocols used by other decentralized social media alternatives like Mastodon. This commitment to interoperability would allow users to migrate their accounts, along with follower data, to non-Meta-controlled platforms. Although this feature is not currently available, Meta’s acknowledgment of its importance indicates a potential future direction. Interoperability requirements are seen as crucial by competition experts, as they can promote fair competition based on product quality rather than incumbency advantage.