By Carl Coates
December 5 — What do Facebook, YouTube and assembling a jigsaw puzzle all have in common? They are all competing for your time.
In one of the biggest antitrust cases in recent years, two economics field experiments became the key evidence that helped Meta (Facebook’s parent company) win its case against the Federal Trade Commission (FTC). The FTC argued that Meta controlled a narrow “personal social networking” market—consisting only of Facebook, Instagram, Snapchat, and a little‑known app called MeWe—and sought to force Meta to divest Instagram and WhatsApp. To counter this claim, Meta needed to show real-world evidence that users used other platforms, especially TikTok and YouTube, as good alternatives to Facebook and Instagram. Demonstrating this would undermine the FTC’s market definition and show that Meta faced far more competition than the FTC claimed.
University of Chicago Professor John List designed a field experiment to test this assertion. As the E4E Experiments in Economics video explains, experiments randomly assign participants to treatment and control groups to isolate the effect of a single variable. Unlike observational data, experiments isolate unobserved factors, enabling researcher to draw confident conclusion about behavior. A classic example: economists paid students for better grades to determine the impact of motivation on student learning outcomes.
ABOUT THE EXPERIMENT
Professor List and his team recruited 6,000 Facebook and Instagram users and asked them to install tracking software on their phones. Participants were offered $4 for every hour they did not use Facebook or Instagram.
This simple but powerful design revealed how people actually behave: when participants stopped using Meta’s apps, their usage of Facebook or Instagram dropped by about 60%. More importantly, they did not primarily switch to Snapchat or other apps the FTC listed as Meta’s only competitors. Instead, the largest share of diverted time went to offline activities – including things like building a jigsaw puzzle. Other major substitutes includes TikTok, YouTube, and gaming apps. The experiment harkens back to Gary Becker’s 1965 “A Theory of Time Allocation” where he argues that consumers derive value not just from goods themselves but from how goods are combined with their time.
THE IMPACT ON THE CASE
The judge called the experiment “the single best evidence of what consumers consider alternatives to Meta’s apps”. This experiment also illustrates Milton Friedman’s view that economics should test predictions about real-world behavior, not just building theories. According to the researchers, this was “to our knowledge, the first field experiment conducted for a major federal anti-trust trial,” making it a groundbreaking case for using economic field experiments in the courtroom. Together, all this evidence painted a clear picture: Meta faces real competition for people’s time.
The case shows how experiments can answer important policy questions that might otherwise depend on guesswork. The FTC’s argument depended on assumptions about consumer behavior — assumptions that, when tested, did not hold up. This case is a powerful example of what Professor List has championed throughout his career: we shouldn’t wait for data to appear; we should go out and create it to answer important questions. By directly testing whether breaking up Meta would benefit consumers, the experiment challenged the FTC’s predictions and helped shape one of the most important antitrust decisions in years. It demonstrates that when economic theories meet real-world testing, the evidence can transform the debate.
Experiments like this demonstrate how testing can illuminate what actually works, whether the goal is addressing major social challenges or ensuring consumer welfare in different markets.
FOR EDUCATORS: TEACHING ABOUT FIELD EXPERIMENTS
The idea of field experiments in economics is also accessible to high school students. Our E4E resources include the Experiments in Economics video and related lesson plan about the design of field experiments in economics and what they can teach us. Economists test predictions to build confidence in their claims. Identifying components of effective experiments and avoiding flaws during the design phase can help students better understand how researchers evaluate policies and solutions to social problems. These lessons can open students’ eyes to all that can be learned from other such experiments: does paying for grades improve student outcomes? Should mosquito nets be given for free in regions that face malaria, or should people be charged a price? How did providing deworming pills in developing countries lead to positive educational and health outcomes?
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