INTRODUCTION
Meta released Instagram Threads, its micro-blogging platform recently.[1] It garnered quite some public attention within the days of its release. Adam Mosseri, the CEO of Instagram said that the new app aims to foster public discussions among communities centred around vibrant interests like sports, music, fashion, beauty, and entertainment, which do not necessitate engagement with political or news-related content.[2]
Since the release of Threads, the internet has been comparing the app with Twitter and how Meta plans to compete with Twitter. Elon Musk, the owner of Twitter and Meta CEO Mark Zuckerburg engaged in a war of words as the new Meta app gained more registrations.[3] Twitter also threatened to sue Meta accusing that there is a “systematic, willful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property.”[4] In a tweet, Elon Musk wrote that “competition is fine, cheating is not.”[5] This blog post seeks to look at Threads from the lens of competition law.
RELEASE OF THREADS APP BY INSTAGRAM
Instagram Threads provides a forum for people who are hesitant to use Twitter due to the unavailability of their existing social contacts on that platform. Since an existing user of Instagram does not have to go through the formalities of registering an account on Threads, the users found it comparatively easier than Twitter to use. Threads also provides the user with an option to invite or follow their existing social contacts on Instagram making it easier for them to connect to their social contacts and engage in conversation with them.
These features might tempt the users to make an account on the Threads app but it is too late when they realise that these features are a façade to hide the fact that once a user has registered on the platform, they would not be able to delete their Threads profile unless they also delete their Instagram Account.[6]
This situation puts the users in a quandary as they have to choose between deleting their Instagram account and losing all their social connections and data or continuing to use threads. Continuance by the users might possess privacy concerns as it can be discerned from the official listing on the Apple App Store that Threads may collect data on health, fitness, finances, contacts, browsing history, usage, location, search history, identifiers, and other sensitive information.
UNDERSTANDING RELEVANT MARKET OF THREADS
In Indian competition law, for the application of section 4 of the Competition Act, 2002 (“Competition Act”), a relevant market has to be determined to examine whether an entity is dominant in that market and is abusing it for its benefits.[7] According to section 2(r) of the Competition Act, the relevant market is decided by the commission by taking into consideration the relevant product market and relevant geographical market.[8] In the case of Threads, the whole of India can be considered to be a relevant geographical market as the app has reached all over the nation and the micro-blogging market can be considered to be a relevant product market, in which Twitter is its main competitor.
WHETHER THE CONDITION IMPOSED BY META FOR THE DELETION OF ACCOUNT ON THREADS ANTICOMPETITIVE?
Under Indian competition law, this condition may come under the head of Abuse of Dominant position through imposition of an unfair condition which is provided under section 4(2) of the Competition Act.[9] For a company to abuse its dominant position, it must be in a dominant position in the first place. Meta is a dominant entity when it comes to OTT (Over the Top) messaging apps as it has reported 3.74 billion active users and a projected market valuation of $1,237 billion by 2030.[10] Threads leverage Instagram’s expansive user base of 2.35 billion, instead of starting from scratch like other platforms attempting to compete with Twitter. The platform has already reported more than 80 million registrations in a quick span of 2 days from the app’s release.[11]
In 2021, the CCI took into cognizance of a similar factual situation about the new privacy policy of WhatsApp. CCI found it as a ‘take it or leave it’ policy amounting to abuse of dominant power by WhatsApp. Although the order of the CCI was challenged before the Delhi High Court[12] and then the Supreme Court, the Supreme Court affirmed with the High Court that the CCI was acting within the scope of its powers granted under the Competition Act.[13]
The case of CCI v. DLF Limited[14] is yet another landmark decision that emphasizes the significance of fair competition and consumer rights protection in India. It underlines the importance of firms not imposing unfair conditions on customers and the role of the Competition Act of 2002 in preventing anti-competitive activities.
Whether this condition being imposed is fair or unfair, will be determined by the CCI (Competition Commission of India) as it has the power to take into cognizance a company’s conduct under section 19[15] if it is found as prima facie abuse of dominance and the commission has taken into consideration the factors, provided under section 19(4) such as market share of the enterprise, size and resources of the enterprise, economic power of the enterprise, dependence of consumers on the enterprise etc.[16] This condition may or may not be anticompetitive but it certainly makes some users uneasy.
This condition will not only attract the attention of CCI but also the FTC (Federal Trade Commission), an independent agency of the United States government whose principal mission is the enforcement of civil antitrust law and the promotion of consumer protection. This condition can be declared as an anti-competitive and anti-trust matter by the FTC under section 5 of the Federal Trade Commission Act 1914. This condition can be declared as an anti-competitive and anti-trust matter by the FTC under section 5 of the Federal Trade Commission Act 1914.[17]
CONCLUSION
In conclusion, the release of Instagram Threads by Meta generated both excitement and controversy. Despite the initial draw of easy transitioning from Instagram to Threads, the app is already facing a decline in users. Under Indian competition law, Meta’s dominance and Threads’ rapid loss of users raise concerns about the imposed account deletion condition. The Competition Commission of India (CCI) may investigate whether this constitutes an abuse of dominance in the micro-blogging market.
Past cases, such as WhatsApp’s privacy policy, emphasize the importance of fair competition and consumer protection in India. The CCI’s actions reinforce the role of the Competition Act of 2002 in curbing anti-competitive practices. The fairness of Meta’s condition will be determined by regulatory bodies like the CCI and potentially the U.S. Federal Trade Commission (FTC), considering factors like market share and consumer dependence.
Threads’ situation underscores the evolving landscape of competition law in the digital age, emphasizing the need to balance innovation with fair practices in micro-blogging and social media, especially in the face of declining user engagement.
Authors Name: Priyam Soni and Gurman Singh Narula (National Law Institute University, Bhopal)
References:
[1] Facebook, ‘Introducing Threads: A New Way to Share With Text’ (Meta, 5 July 2023) <https://about.fb.com/news/2023/07/introducing-threads-new-app-text-sharing/> accessed 22 August 2023
[2] Govind Choudhary, ‘Threads app is not for news and politics, says Instagram CEO Adam Mosseri’ (Live Mint, 8 July 2023) <https://www.livemint.com/technology/tech-news/threads-app-is-not-for-news-and-politics-says-instagram-ceo-adam-mosseri-11688808851141.html> accessed 22 August 2023
[3] Epsita Gunti, ‘Threads vs. Twitter: The war of words’ (Telangana Today, 11 July 2023) <https://telanganatoday.com/threads-vs-twitter-the-war-of-words> accessed 22 August 2023
[4] Emily Olson, ‘Twitter threatens to sue its new rival, Threads, claiming Meta stole trade secrets’ (NPR Org, 7 July 2023) <https://www.npr.org/2023/07/07/1186367564/threads-meta-twitter-lawsuit> accessed 22 August 2023
[5] Deepak Upadhyay, ‘Competition is fine, cheating is not: Elon Musk after Threads launch’ (Live Mint, 7 July 2023) <https://www.livemint.com/technology/apps/competition-is-fine-cheating-is-not-elon-musk-after-threads-launch-11688679893595.html> accessed 21 August 2023
[6] Pranav Dixit, ‘Threads profile can’t be deleted without deleting your Instagram account; Meta responds’ (Business Today, 7 July 2023) <https://www.businesstoday.in/technology/news/story/threads-profile-cant-be-deleted-without-deleting-your-instagram-account-meta-responds-388686-2023-07-07> accessed 22 August 2023
[7] The Competition Act, 2002 (12 of 2003) s 4
[8] The Competition Act, 2002 (12 of 2003) s 2(r)
[9] The Competition Act, 2002 (12 of 2003) s 4(2)
[10] Skyquest, ‘Global Over-The-Top/OTT Market Insights’ (Skyquest, 1 November 2022) <https://www.skyquestt.com/report/over-the-top-ott-market#:~:text=Top%2FOTT%20Market%3F-,Over%2Dthe%2DTop%2FOTT%20Market%20size%20was%20valued%20at,period%20(2023%2D2030)> accessed 22 August 2023
[11] Admin, ‘Threads App reaches 80 million users as Twitter threatens lawsuit’ (ITVoice, 8 July, 2023) <https://www.itvoice.in/threads-app-reaches-80-million-users-as-twitter-threatens-lawsuit> accessed 22 August 2023
[12] Krishnesh Bapat, ‘Delhi HC dismisses WhatsApp’s appeal to restrain CCI from investigating its Privacy Policy’ (Internet Freedom Foundation, 27 August 2022) <https://internetfreedom.in/delhi-hc-dismisses-whatsapps-appeal-to-restrain-cci-from-investigating-its-privacy-policy/> accessed 22 August 2023
[13] Sonam Mathur and Shubhang Joshi, ‘Supreme Court upholds CCI’s investigation of WhatsApp’s privacy policy’ (Lexology, 3 November 2022) <https://www.lexology.com/commentary/competition-antitrust/india/talwar-thakore-associates/supreme-court-upholds-ccis-investigation-of-whatsapps-privacy-policy> accessed 22 August 2023
[14] CCI v DLF Limited MANU/TA/0012/2014 decided on 19/05/2014
[15] The Competition Act, 2002 (12 of 2003) s 19
[16] The Competition Act, 2002 (12 of 2003) s 19(4)
[17] The Federal Trade Commission (FTC) Act s 5
