This analysis was first published in SvD Näringsliv, in Swedish, on February 3rd, 2022.

Meta’s stock collapsed after Mark Zuckerberg singled out TikTok as one of the main reasons company growth is weaker than expected. At the same time, the Chinese app may be the answer to one of his hardest problems.

Under pressure and slightly stumbling, Mark Zuckerberg, CEO of Meta (formerly Facebook), tried to explain why the company’s forecasts for the future no longer looked as rosy as before. The company is facing, he described, a possible paradigm shift within social networks.

“This really isn’t the first time we’ve gone through a big format shift,” Zuckerberg assured the analyst community.

That squares with the history. The shift from computer to mobile was one such moment, and Facebook handled it well — through the Instagram acquisition, but also through a successful move of both ads and users. Today Meta is primarily a mobile company.

But then came the words that revealed the situation is different this time around.

“What is somewhat unique here is that TikTok as a competitor is already so large, and they continue to grow quickly from a big user base.”

What followed was a collapse in the stock.

The shift from computer to mobile was driven primarily by user behavior and the rise of smartphones. This time, it’s a competitor — TikTok — driving the change in social networks. That is a threat Meta hasn’t had to handle in this way before. And it seems to have unsettled the company.

TikTok is a reminder that even the most established market leaders sometimes get competition from an unexpected direction.

And it can happen fast.

In 2017, the Chinese company ByteDance acquired what was described as a “lip-sync app” called Musical.ly. The following year, it was merged with a new, similar app called TikTok. That also became the brand that was launched around the world, with the exception of its home market China, where the equivalent is called Douyin. After huge ad investments, TikTok became the most downloaded app in the world in 2021.

TikTok is therefore a big headache for Mark Zuckerberg, since he is both trying to convince the market of the metaverse as a future vision and keep his existing business running. A metaverse that earns real money is not something we’ll see for several years — hundreds of billions are to be invested before it can even begin to be realized. And most new initiatives from the company — except Instagram Reels, a TikTok clone — have struggled to get traction. Does anyone remember Facebook Dating, which launched in Sweden in 2020?

But there is one area where TikTok might actually be something of Mark Zuckerberg’s rescue — handling antitrust law. The fact that TikTok is a Chinese app that operates, and now dominates, an American market is one of the US tech giants’ primary counterarguments against the political pressure they are facing. Should foreign companies be allowed to operate freely in the US while their American counterparts have specific laws to follow?

Even the lawmakers themselves have noticed this complexity. In a podcast interview with The New York Times, Lina Khan, head of the FTC, asked the question herself of how to handle different regulations for companies operating in the same market. But she didn’t have a good answer. Perhaps TikTok — and the fear of a China-dominated internet — is exactly what Zuckerberg needs, after all, to get a little breathing room.