It means "win or lose". Think of life. We eat animals and we get eaten by the animals. It is a case of "eat or be eaten". That is where the expression comes from. It can be used in other situations. Business for example.

It means that if you don't defeat someone, they will defeat you. Think of it like the law of jungle animals: If two hungry lions attack each other, the one that is beaten will become food for the other lion.

Florrie, to ask questions like this one, it is good to provide more details! In case anyone was curious, it is from Season 2 Episode 11. The line was: Mrs. Green: Monica! You look gorgeous! Oh, my! The last time I saw you, it was eat or be eaten. Explanation: Mrs. Green had not seen Monica in a long time. Monica is now very thin and beautiful. In the past, Monica was very very overweight and loved to eat non-stop. (I know all this because I used to watch friends a lot. :P ) So now, years later Mrs. Green sees Monica again for the first time. She is very shocked at Monica's figure now. So she makes the comment: "The last time I saw you, it was eat or be eaten", suggesting that Monica was like a wild animal eating as if her life depended on it. 'Eat or be eaten' is a phrase used to describe the law of nature. And that is that the law of nature it is 'survival of the fittest'. In order to survive animals must eat other animals. Only those who are fittest will survive in nature. Another very similar saying is "kill or be killed." So in the Friends episode, Mrs. Green's comment is a joke based on this.