Re:FTC Sues Facebook for Illegal Monopolization
by theptip on Wednesday December 09, 2020 @03:41PM
(#25364552)
From the article, the claim is:
> illegally maintaining its personal social networking monopoly
"Monopoly" is a term that's fairly overloaded/misunderstood; while in economics refers specifically to a situation where there is a single supplier for a good/service (https://en.wikipedia.org/wiki/Monopoly#Market_structures), in the legal definition "monopoly power" is defined much more loosely, as "the power to control prices or exclude competition" in the US (e.g. https://www.justice.gov/atr/competition-and-monopoly-single-...), and there are complex tests for monopoly power in the EU including >50% market share which I'm less familiar with.
I think common discourse tends to interpret monopoly in the economics sense, which leads to confusion when we look at antitrust enforcement like this. Not to mention that under antitrust laws you don't even need to have (loosely defined) "monopoly power" to be engaging in illegal anticompetitive behaviors.
Specifically analyzing those competitors:
LinkedIn is a business social network, not a personal social network as they define it. Forums are not "social networks" as commonly defined (graph of relationships).
Twitter is a competitor, but they have far less market share, e.g. see https://www.t4.ai/industry/social-media-market-share#:~:text... which puts Facebook at 69% of social media users, (a monopoly in most definitions), while twitter is at ~8%. Somewhat confounding because users can be on both, but the magnitudes are what's important.
I think Ben Thompson has the best analysis of antitrust as it pertains to Facebook, as he deeply understands the market dynamics that give Facebook and other large tech companies their market power, e.g. see https://stratechery.com/2017/manifestos-and-monopolies/.
> illegally maintaining its personal social networking monopoly
"Monopoly" is a term that's fairly overloaded/misunderstood; while in economics refers specifically to a situation where there is a single supplier for a good/service (https://en.wikipedia.org/wiki/Monopoly#Market_structures), in the legal definition "monopoly power" is defined much more loosely, as "the power to control prices or exclude competition" in the US (e.g. https://www.justice.gov/atr/competition-and-monopoly-single-...), and there are complex tests for monopoly power in the EU including >50% market share which I'm less familiar with.
I think common discourse tends to interpret monopoly in the economics sense, which leads to confusion when we look at antitrust enforcement like this. Not to mention that under antitrust laws you don't even need to have (loosely defined) "monopoly power" to be engaging in illegal anticompetitive behaviors.
Specifically analyzing those competitors:
LinkedIn is a business social network, not a personal social network as they define it. Forums are not "social networks" as commonly defined (graph of relationships).
Twitter is a competitor, but they have far less market share, e.g. see https://www.t4.ai/industry/social-media-market-share#:~:text... which puts Facebook at 69% of social media users, (a monopoly in most definitions), while twitter is at ~8%. Somewhat confounding because users can be on both, but the magnitudes are what's important.
TikTok is a valid competitor too, but again they don't have nearly as dominant a position as Facebook <25% of FB's MAU according to https://datareportal.com/social-media-users?rq=tiktok.
I think Ben Thompson has the best analysis of antitrust as it pertains to Facebook, as he deeply understands the market dynamics that give Facebook and other large tech companies their market power, e.g. see https://stratechery.com/2017/manifestos-and-monopolies/.