Instagram CEO Adam Mosseri Testimony Reveals TikTok Led To Worrisome Engagement Drop For Meta's Platform: 'You're Either Growing, Or You're Slowly Dying'

On Thursday, Instagram CEO Adam Mosseri's testimony revealed how TikTok's explosive rise forced the Meta Platforms, Inc. META-owned app into a fight for survival.

What Happened: Mosseri testified in the Federal Trade Commission's antitrust case against Meta, where the U.S. government claims the tech giant has illegally monopolized the social networking market.

The trial detailed how, when Mosseri took over Instagram in 2018, the app was facing worrisome drops in user engagement, largely due to competition from ByteDance-owned TikTok. By 2019, internal estimates showed that 23% of Instagram's declining U.S. time spent could be attributed directly to TikTok.

"We can't explain it all, but what's clear at this point is that we need to adapt, and do so quickly," Mosseri wrote to his team in March 2020.

In his testimony at DC courts, Instagram’s boss said, "You're either growing, or you're slowly dying."

Instagram's comeback came largely through improving its Reels product with better AI-driven recommendations. But TikTok remains "the fiercest competition that we have faced," the report noted.

Interestingly, in his testimony, Mosseri noted that while TikTok used to offer a passive, lean-back viewing experience, it has now become "every bit as participatory as we are," even rolling out features to strengthen friend connections.

Why It's Important: The testimony comes at a pivotal moment as the FTC argues that Meta's dominance in personal social networking — a market that includes apps like Instagram and Snapchat by Snap Inc. SNAP — is stifling competition.

Meta has argued against the antitrust allegations, highlighting competition from TikTok and YouTube, which is owned by Alphabet Inc. GOOG GOOGL.

While Meta has claimed in court that entertainment has eclipsed social connections in its business, Mosseri's comments on Thursday highlight that friend-based engagement remains a key differentiator for Instagram, the report said.

Price Action: Meta’s shares slipped 0.015% in after-hours trading, settling at $597.92, according to Benzinga Pro data.

The company holds a momentum score of 82.95% and a growth score of 76.10%, as per Benzinga's exclusive Edge Rankings. Click here to see how Meta stacks up against Snapchat, Alphabet and others.