Can you clarify the abusive part?

In your scenario, Alice already decided not to buy anything from AcmeShop.

Even if AcmeShop advertised on Facebook it wouldn't have changed her behavior. She got a better deal on Facebook Marketplace. And she was already visiting Facebook and the Marketplace is already a single click.

I don't see the abusive or predatory part. It seems like Facebook Marketplace just offered a superior used 3D printer for her.

So what part am I missing?

It's one sided. Facebook have all the data for how AcmeShop's products are selling. They are free to use this information to undercut AcmeShop's products with data AcmeShop does not have on Facebook.

Yes, it's a better deal on the face of it, but as soon as AcmeShop goes out of business, competition is gone and Facebook can charge whatever they want. And we all know from the US markets that low to no competition does not benefit the consumer in any way.

None of this makes any sense.

Facebook Marketplace is a marketplace. They don't control the products that are being advertised. All they can control is the weighting of ads they run on certain products e.g. "AirPods are popular, increase ad spend to 20% of total".

But they could do this by simply optimising for ROAS just like every other company does.

If Facebook is sharing AcmeShop data with Marketplace, and it's a very big if, it would still be of almost no value.

They don't control the products that are being advertised, but they make personalised ads for Marketplace products more effective by using data they collect elsewhere. If the ads are more effective, Marketplace is better at shifting goods, undermining the competition because their competition is forced to share data with Facebook through Facebook's (not Marketplace's) market position.

I'm still not following.

Facebook isn't setting prices on Marketplace -- sellers like you and me are. We're not getting any data from AcmeShop.

When you say "Yes, it's a better deal on the face of it", I don't know what "deal" you're talking about.

> In your scenario, Alice already decided not to buy anything from AcmeShop.

Not really, that's exactly what "remarketing" ads are for — companies track people's interest and remind them of their products. However, in this case, Facebook is double dipping by taking money from their paying customer (AcmeShop), and then using data they obtained whilst serving their paying customer to frontrun the customer.

If you or I tried something like that with Facebook — say, taking salary from Facebook and also using data we accessed through our role to undermine Facebook's business — it'd clearly be both illegal and immoral. Somehow, with enough layers of indirection, for a lot of people the same play is acceptable when Facebook does it.

But I see "remarketing" ads everywhere. Google does it too.

How is Facebook showing remarketing ads for items on Facebook Marketplace, the ads paid for by a Marketplace seller who is boosting their item, any different from Google showing remarketing ads for items on eBay, paid for by an eBay seller?

Because that same thing would be happening if AcmeShop were using Google Analytics. Or if Alice had just done a Google search, which might be how she found AcmeShop in the first place.

Or are you arguing against remarketing ads entirely?

I guess I'm just having a hard time seeing any harm here because Alice visited AcmeShop first and didn't buy anything. Like, if I run a shop stall that sells frobulators, and I see someone pass by a nearby stall that also sells frobulators, and they browse but don't buy one, and after they leave I wave to them, and they buy one from me because I have the exact model they wanted... I don't see anything illegal or immoral at all. The first store already had their chance! If Alice liked their items, she would have already bought from there, or gone back there when she was ready to buy.

When Facebook is showing ads for items on Facebook Marketplace based on a customer visiting AcmeShop, for Facebook it's not "remarketing". It's only "remarketing" when AcmeShop does it. For Facebook, it's just targeting based on data they obtained during providing a paid service to AcmeShop. The customer didn't express interest but then abandon their purchase from Facebook yet.

Google doing the same thing is hardly a good excuse.

In your analogy, you don't just "see". You're employed by a nearby stall because you're one of the few plumbers in the town, so you're in that shop a lot, but you're also making photos of their customers and then use those photos to find them on the street and advertise your frobulators. You really don't see anything weird about this scenario?

Besides, if a shop has only one chance ever, what are remarketing ads (marketed by Facebook to businesses) for?

I think you've lost me.

I thought you were suggesting this was remarketing, now you're saying it's just targeted advertising, are you saying targeted advertising is bad? Because AcmeShop is free to run targeted ads on Facebook too, whether remarketing or not.

I genuinely don't understand what you think Facebook is doing wrong here in having a targeted ads platform at the same time as running Marketplace. I don't see how doing the two together is abusive or predatory in a way that is different from doing those things as separate corporations.

Alright, let's reframe this:

- AcmeShop is paying Facebook money to run a targeted marketing campaign on Facebook

- to do this, in practice AcmeShop is forced to share visit data with Facebook (this bit could be done differently, but for some reason that's how Facebook does it)

- a customer goes to AcmeShop, doesn't make an immediate purchase, leaves

- AcmeShop is paying Facebook to run a remarketing campaign for that customer, showing them the same product leading to AcmeShop

- at the same time, Facebook is using information that they obtained in the process of providing paid services to AcmeShop to show goods on their marketplace platform to the customer. For Facebook, it's not "remarketing", it's just "marketing" at this point. Not only that, but they control which ads they are showing, and naturally with Marketplace-only placements Facebook has an advantage over AcmeShop (again, using information that they effectively forced AcmeShop to provide)

Does this reframing make the problem of Facebook being both an ad seller, an ad manager, and offering the same service as their customers any clearer?

Thanks for explaining. I think I've identified the part in your argument I don't understand:

> but they [Facebook] control which ads they are showing, and naturally with Marketplace-only placements Facebook has an advantage over AcmeShop

My question is, why do you think Facebook won't simply sell the ad space to the highest bidder, whether it is AcmeShop or a Marketplace seller? Why do you think Facebook is giving an advantage to Marketplace ads? Do you have any evidence they are?

Remember, Facebook doesn't even make money if you sell something locally and pay in cash. A big way that Marketplace makes money is through ads. But if AcmeShop is bidding more for ad space, then presumably Facebook will show the AcmeShop retargeting ad instead.

If there is evidence that Facebook is showing lower-bidding Marketplace ads over higher-bidding AcmeShop ads in your Instagram feed, because of the fee it takes on shipped items that use Facebook Marketplace Payments, then yes I agree that would definitely be an abuse of power! And thank you for explaining that -- if that is what you're saying.

But I think it has to be shown that Facebook is actually engaging in that kind of anti-competitive behavior. We can't just assume it. There's nothing inherently wrong with running the two businesses together.

(Also, if by "Marketplace-only placements" you're referring to boosting listings within Marketplace as opposed to more general ads like on Facebook, there's nothing preventing AcmeShop from listing and boosting its items on Marketplace as well.)

> why do you think Facebook won't simply sell the ad space to the highest bidder, whether it is AcmeShop or a Marketplace seller?

Depends on which placement you mean.

"Boosted listings" in Facebook Marketplace? AcmeShop can't bid on that.

In-Marketplace ads like [0]? They are similarly in-Marketplace, I don't think it's technically possible to bid on them.

In-feed Marketplace ads like [1]? They are specifically Marketplace, I have no evidence that they enter the same bidding pool, and it seems improbable.

In-feed generic auto-placed ads like [2]? Maybe, maybe not.

> Remember, Facebook doesn't even make money if you sell something locally and pay in cash.

Facebook doesn't just make money from boosted listings, they also benefit from people just using Facebook. Even if Facebook didn't make any money directly from Marketplace, it'd still be worth it for them and it'd still be anti-competitive. If they can make themselves the main marketplace, it creates a large captive audience scrolling through their ads.

> But I think it has to be shown that Facebook is actually engaging in that kind of anti-competitive behavior. We can't just assume it.

Aren't we commenting under an article about a fine for anti-competitive behaviour?

[0]: https://storage.googleapis.com/website-production/uploads/20...

[1]: https://newsfeed.org/wp-content/uploads/Marketplace_boosted_...

[2]: https://storage.googleapis.com/website-production/uploads/20...

Thanks for all the extra information.

I think we've reached the point where it really does hinge on exact details which we don't really know the answers to. And while yes, we are commenting on an article about supposed anti-competitive behavior, the article doesn't actually describe the specifics at all, and courts get things wrong all the time (and overturned on appeal).

I mean, AcmeShop is free to list their items on Marketplace as well and compete with boosted ads in cases [0] and [1], and like you say, "maybe, maybe not" their ads compete on bids for [2] -- I would assume they would if Facebook is maximizing profit.

I don't see any evidence that Facebook is obviously or necessarily abusing its position, but it's not like I could rule it out either, specifically in the case of [2] -- it seems like it depends on the exact ad selection algorithm they use.

In any case, I can't keep the conversation going any further, but it's been very informative having this exchange. It's been a great back-and-forth, so thank you!

But this is how online advertising works.

AcmeShop can equally run ads on other companies 3D printers on Facebook.

And they can equally run ads on Google about Facebook Marketplace.

"Normal" online advertising is neutral with respect to companies bidding on placements. Not so much with Facebook, which is under no obligation to run a bid on every ad they serve. Some of those ads are dedicated Marketplace ads, and AcmeShop can't bid on them, or even limit access to the data that Facebook collected while performing their contractual duties to AcmeShop.

It's 100% predatory. I hope we will see similar cases brought against Amazon soon (if they haven't been already).

The fact that so many companies are dependent on selling on Amazon, yet Amazon also sells their own products, is ludicrous.

- AcmeShop sells 3d printers and sell on Amazon

- Amazon sees these printers are selling well

- Amazon buys/creates their own 3d printer brand

- Amazon gives their own products preferencial treatment and uses all it's data for how AcmeShop's printers are selling to undercut them in all markets

- AcmeShop goes out of business because unaware consumers buy what, on the surface, is a better deal

- With no competition Amazon increases it's prices to whatever it likes

Is Amazon able to make a better value 3d printer?

If yes, seems like consumers win?

If no, then people will lose trust on Amazon over time and will use other shopping platforms. So Amazon is basically trading short-term profit for long-term profit.

Consumers win when there is continued competition. Short term, sure, consumers get a better printer, but once Amazon has taken over the market where is the drive to make anything better or cheaper? It's competition 101..

I think a lot of American's have lost trust in AT&T, Time Warner Cable, but it doesn't meant they're not forced to use them.

If you control the pipes you should not be allowed to also sell the water in those pipes. You will always be in a far greater position to take advantage and become a monopoly, which, is well documented, hurts consumers.

Aww... have you ever heard about price dumping to kill the competition? Kindle would be a good example here :D

Every big retailer has its own house brand. There is nothing special about a big retailer using their sales data to make decisions on house branding.

No they cannot adjust their pricing to whatever they like because Amazon is not a monopoly. People can buy stuff elsewhere. If Amazon pricing is bad, people will leave and it will kill Amazon.