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Competition among digital services: Evidence from the 2021 Meta outage

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  • Rehse, Dominik
  • Valet, Sebastian

Abstract

On October 4, 2021, all services provided by Meta Platforms, Inc. (then Facebook, Inc.) became unavailable unexpectedly for all its worldwide users for a period of about six hours. We use detailed high-frequency tracking data from smartphones, tablets and desktop computers of thousands of Meta users from Spain and the United States to study their behavioral responses during the outage. We find (1) the strongest substi- tution occurs within social media and messaging services, (2) evidence of substitution across service categories, (3) substitution patterns that vary across demographic groups, (4) substantially higher substitution rates among multi-homers, (5) substitution rates that increase over the course of the outage, (6) distinct differences in substitution patterns between countries, and (7) increased usage of non-Meta digital services after the outage. To our knowledge, this study presents the first comprehensive revealed-preference analysis of substitution patterns when an entire user population simultaneously seeks alternatives to major digital services.

Suggested Citation

  • Rehse, Dominik & Valet, Sebastian, 2025. "Competition among digital services: Evidence from the 2021 Meta outage," ZEW Discussion Papers 25-015, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:314420
    as

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    References listed on IDEAS

    as
    1. Diane Coyle & David Nguyen, 2020. "Valuing Goods Online and Offline: the Impact of Covid-19," Economic Statistics Centre of Excellence (ESCoE) Discussion Papers ESCoE DP-2020-10, Economic Statistics Centre of Excellence (ESCoE).
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    3. Marc F. Bellemare & Casey J. Wichman, 2020. "Elasticities and the Inverse Hyperbolic Sine Transformation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(1), pages 50-61, February.
    4. Calvano, Emilio & Polo, Michele, 2021. "Market power, competition and innovation in digital markets: A survey," Information Economics and Policy, Elsevier, vol. 54(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Digital services; Competition; Substitution; Attention markets; Outage;
    All these keywords.

    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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