Leaked Audio of Mark Zuckerberg Details Facebook’s Plan to Use Its TikTok Clone, Lasso, to Upend the Chinese Upstart

A leaked recording of Facebook CEO Mark Zuckerberg speaking to employees in July has revealed the social networking giant’s potential strategy when dealing with competitors, specifically the popular TikTok app.

In a transcript of the recorded meeting, which The Verge first reported, a Facebook worker asked Zuckerberg about Facebook’s “plan of attack” on the video-sharing app, owned by Chinese tech company ByteDance, which currently maintains a private valuation of about $75 billion.  

TikTok has skyrocketed in popularity with younger users who use the service to film themselves lip-syncing along to songs, and has been downloaded roughly 950 million times since it debuted two year ago. The rise of TikTok has not been lost on Zuckerberg, who noted that the app is “really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world.”

“It’s starting to do well in the U.S., especially with young folks. It’s growing really quickly in India,” Zuckerberg continued. “I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.”

The fact that Zuckerberg is paying attention to TikTok overtaking Instagram “in India in terms of scale” is noteworthy, considering Instagram is key to Facebook’s overall appeal to teenagers and young adults. As the Facebook CEO noted, several other Chinese tech companies like Tencent and Alibaba have not had as much luck spreading their various mobile apps outside of China and Southeast Asia.

In order to halt TikTok’s worldwide expansion, Zuckerberg said that it’s trying to spread its TikTok clone Lasso, which debuted last November, in countries where TikTok hasn’t caught on. He pointed to Mexico as being one of Lasso’s first big tests in getting “product-market fit.” 

“We’re trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big,” Zuckerberg said.

Zuckerberg also pointed to a potential problem facing TikTok in that “their retention is actually not that strong after they stop advertising,” although it’s unclear what those retention numbers are and if they apply to the whole world or just in certain countries. What it does show is that Facebook is keeping tabs of ByteDance’s advertising spending and how that may impact TikTok user habits—a competitive tactic.

In response to Fortune’s request for comment on TikTok and how Facebook got the Chinese startup’s retention numbers, a representative for the social network pointed to a post by Zuckerberg that addressed neither concern.

Zuckerberg’s focus on Bytedance comes amid much scrutiny by lawmakers about potential anti-trust issues surrounding tech giants like Amazon, Google, and Facebook. In fact, Zuckerberg addresses the potential of lawmakers like Senator Elizabeth Warren passing laws that would break up tech giants because of their dominance and size.

“I mean, if she gets elected president, then I would bet that we will have a legal challenge, and I would bet that we will win the legal challenge,” Zuckerberg said.

In September, The Wall Street Journal reported that members of Snap’s legal team are speaking with the Federal Trade Commission as part of an antitrust investigation into Facebook. The article said that the FTC has been meeting with many of Facebook’s competitors to discuss “the aggressive growth tactics that propelled Facebook from a social network for college students 15 years ago to a collection of services now used by more than one in four people in the world every day.” Facebook has been accused of cloning Snapchat’s features into the social network and Instagram, in a similar way to how Lasso’s features resemble TikTok’s.

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https://fortune.com/2019/10/01/mark-zuckerberg-leaked-audio-facebook-meeting-tiktok-lasso/

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