Competition among digital services: Evidence from the 2021 meta outage


Rehse, Dominik ; Valet, Sebastian


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URN: urn:nbn:de:bsz:180-madoc-706132
Document Type: Working paper
Year of publication: 2025
The title of a journal, publication series: ZEW Discussion Papers
Volume: 25-015
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: L40 , L82 , L86,
Keywords (English): digital services , competition , substitution , attention markets , outage
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 substitution 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




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