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Judge dismisses FTC and state antitrust complaints against Facebook (cnbc.com)
413 points by ChrisArchitect on June 28, 2021 | hide | past | favorite | 224 comments




I replaced https://news.ycombinator.com/item?id=27666416 in your comment with the URL it points to. That way people can click directly to go to the ruling, and we avoid the crankiness problem with empty thread links (https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...). I hope you don't mind!


yeah fine -- I was trying to account for many ppl just sharing/submitting the link to the PDF and a whole discussion ending up on that thread instead of here as I saw the PDF posted in the wild first


Not sure how relevant this is since it's a third party app, but using Harmonic on mobile the original link would allow me to view the PDF without downloading it (albeit after hitting an empty HN page) while the direct link requires me to download the PDF before viewing.

Tbh I'm just happy to have hacker news, continue as you are.


If you are going to edit people's posts you should have the original and edited posts displayed below your post.


It's rare for us to do anything like this. My guess is that as long as we tell people that we did it (and why; and as long as it was for a good reason), it's not something most of the community would object to. I don't think we need to build new bureaucratic mechanisms.

In this case, I could avoided it by posting a different comment with the same link and pinned that to the top instead, but then ChrisArchitect wouldn't be getting the karma for their contribution. That seemed unfair. Hence the above.

I do sometimes think about building an edit-and-diff mechanism for HN comments though! People could suggest edits to comments and they could be treated like pull requests. I can't tell if this is a great idea that would massively improve the threads, or an idiocy. (Edit: I was looking for a comment where I mentioned this not long ago: https://news.ycombinator.com/item?id=25459870, and found another one where I mentioned it 7 years ago: https://news.ycombinator.com/item?id=8214456. That's nuts!)


Yes, but as a matter of policy, all English language descriptions of what you did will have some wiggle room for interpretation. For something as serious as changing another person's words, you should have a special code path, like text in a special color that says "edited by moderator." Seeing that someone's post was edited shouldn't require expanding a reply and interpreting it, since editing someone's speech is far more delicate and prone to catastrophic outcomes than merely suppressing it.


I hear you, but the problem is that such systems also add cost, not just benefit. I don't only mean dev and maintenance costs (although those too), but the cost to the culture of making this place more bureaucratic. We've always avoided that. HN is a spirit-of-the-law place, not a letter-of-the-law one: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que....

Edit: oh one other point: there will always be "wiggle room for interpretation". The idea of eliminating it is a fantasy, and trying to make systems to eliminate it is a wild goose chase.


I think some distinguishing attribute should be displayed to show that a comment was edited by someone other than the user. It's apparent to me that comments can be edited. How can I be certain that mods haven't silently edited a comment in the past?


This is the sort of thing I think would be a mistake. I posted a clear explanation of what I did and why. I believe that's enough to satisfy the community. It does leave a tiny minority unsatisfied who don't trust what we say, but they are not satisfiable. If we added the feature you're suggesting, how could you be certain that we weren't secretly overriding it sometimes? You would either have to take our word for it—in which case why not just believe us in the first place?—or you would need some other system to validate that one. This is how you get systems upon systems, with no actual solution, for a problem that doesn't even really exist. The same issue would recreate itself at every step.

Don't get me wrong - I'm not saying "just trust us". Trust is earned. But the way to earn it is to always be open to questions, answer them as well as we can, and when people point out mistakes, to admit them and fix them quickly. That's what we try to do, and it's informal and social. Formal/technical methods are neither necessary nor sufficient for community trust, and it would be a big mistake to think otherwise, because it would steal resources away from other things, like human-to-human communication and making the site itself better.


I suppose you are correct. I do trust you - you have earned that trust, and I don't think you have edited any comments yet.


More importantly - if you don’t trust him nothing short of pgp signatures or some form of a blockchain would allow you to be certain - as even if there was an obvious edit function it could be bypassed.


You’re thinking about the culture of your site, I am talking about the rights of your users. Your users create the value and deserve it (honestly it should be protected by law). If you edit the link and then someone takes over the domain and makes it a porn site, that can cause direct harm to your users. You need to accept the cost as part of the cost of doing business, and if you really edit posts very rarely than the bureaucratic impact should be minimal.


This strikes me as an example of the legalistic sort of thinking that is popular with a vocal minority of internet forum users who like to make litigious arguments, look for problems that don't actually exist in practice, then demand bureaucratic systems to "solve" the "problems". I don't believe that we're violating human rights by operating HN, and the idea of building software to address such cases as "someone taking over the domain and making it a porn site" is an example of what I mean by problems that don't exist in practice.

I don't mean to pick on you personally—it's a style of thinking that pops up a lot. Being a moderator, and thus a sort of bureaucrat, attracts arguments from the bureaucratically minded. All I can tell you is that it's the opposite of how we think about HN. In my view it would be a big mistake to let it direct how we operate HN or what features to add. The way I look at it, HN users have a right to an interesting forum that doesn't suck (or at least relatively doesn't suck), that's a hard problem, and anything that detracts focus from it is a really bad idea. I get that you think differently and I don't mean to be disrespectful. But yes, I am thinking about the culture of HN.


I don't think what you did was awful, especially since you went to the effort of explaining exactly what was changed and why.

However, I also think there should be space for discourse about the mechanics of the action; however academic that discussion might end up being.

Personally, I think a suggestion to the OP encouraging them to edit the post themself might have been a less controversial method of achieving the same aim.


I disagree, as a user I think what dang did makes sense and was clearly explained to anyone viewing. Whether something does or doesn't have special treatment in the software is mostly orthogonal to the actual material impact of what happened, which was clearly minimal here.


Some choice quotes from the ruling:

> The FTC is apparently unwilling to allege that Facebook has ever (pre- or post-Instagram acquisition) had something like 85% or even 75% market share; instead it hedges by offering only that the number is somewhere north of 60%. The question naturally arises: which firms make up the remaining 30–40%? Although Plaintiff is correct that it is not required to identify every alleged competitor in its pleadings, its choice to identify essentially none is striking.

> The Court’s decision here does not rest on some pleading technicality or arcane feature of antitrust law. Rather, the existence of market power is at the heart of any monopolization claim. As the Supreme Court explained in Twombly, itself an antitrust case, “[A]district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” Here, this Court must exercise that power. The FTC’s Complaint says almost nothing concrete on the key question of how much power Facebook actually had, and still has, in a properly defined antitrust product market. It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist.


Also;

> The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services. The Complaint contains nothing on that score save the naked allegation that the company has had and still has a “dominant share of th[at] market (in excess of 60%).” Redacted Compl., ¶ 64. Such an unsupported assertion might (barely) suffice in a Section 2 case involving a more traditional goods market, in which the Court could reasonably infer that market share was measured by revenue, units sold, or some other typical metric. But this case involves no ordinary or intuitive market. Rather, PSN services are free to use, and the exact metes and bounds of what even constitutes a PSN service — i.e., which features of a company’s mobile app or website are included in that definition and which are excluded — are hardly crystal clear. In this unusual context, the FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague “60%-plus” assertion too speculative and conclusory to go forward. Because this defect could conceivably be overcome by re-pleading, however, the Court will dismiss only the Complaint, not the case, and will do so without prejudice to allow Plaintiff to file an amended Complaint.

Not sure what the FTC's game plan was going into an antitrust fight without a market share pitch.


Thanks for highlighting this part of the text. It’s shocking to see how vague the complaint was and I hope they get their facts together because this action needs to happen. If I recall correctly, this antitrust lawsuit was filed prematurely because trump wanted to claim credit for it and there was quite a hullabaloo about it at the time.


The CNBC article says 48 states were also participating alongside the FTC? That gives a (surely misleading or unwarranted?) impression of a substantial failure.


If the FTC did file prematurely for political reasons they should've known that the case didn't have a chance. I hope they kept working behind the scenes on a well-formed one. Maybe that was the original plan, rush in with a case to please the Trump administration then follow up with the actual complaint once they finish it. Then again, this may be wishful thinking. Incompetence is a much simpler explanation.


FTC decisions are made by a majority vote of the commissioners. No more than three can be of the same party. It is unlikely this case was filed early for political reasons.

The judge notes two problems (at least!):

(1.) the FTC approved the purchase of Instagram and WhatsApp. Why does it want to change its mind?

(2.) they don’t even attempt a serious market definition. If Facebook is a monopoly, what is it monopolizing? Who else is in the market? This is an absolutely central question in any monopolization or horizontal merger case. Indeed, getting the judge to accept your theory of the market is a big part of the job.

The economics staff at the FTC is not incompetent (I know several people there), but they have a tough job in this case. If it has been up to me I would not have allowed the Instagram and WhatsApp purchases, but the FTC itself approved them!


Well regarding point 1), Facebook made promises during the acquisition process that it subsequently broke.


were those promises made to FTC specifically?


Yes, to get approval for the acquisitions, Facebook made certain promises to the FTC.


Which were?


here's the letter the FTC sent to facebook about whatsapp. https://www.ftc.gov/system/files/documents/public_statements... I have no clue about IG dealings but wouldn't be surprised if they predated monopoly concerns


And were those promises formalized in a contract somewhere?


> If the FTC did file prematurely for political reasons they should've known that the case didn't have a chance.

Perhaps they did know the case wouldn't have a chance. Perhaps there isn't a plan to follow up with the actual complaint. It's not like the federal government has seriously pursued anti-trust activity in recent decades.


It’d be weird that the preeminent anti-trust academic just accepted a position as the head of the FTC with bipartisan if they didn’t intend to pursue antitrust. It’d be weird to offer it, and a bad decision she chose to accept it.


Just because she is an antitrust academic doesn't mean she automatically believes there is a winnable lawsuit here. If she doesn't think she's likely to win, perhaps she might choose not to follow through on the lawsuit.


Ouch. The judge didn't really hold back there, the guys in FTC must be stinging. I'm not a fan of FB but it doesn't sound like FTC deserved to win that case.


yup, they brought a weak case against the giant, should have prepared better.


Not to be combative: It seems like you're implying that this failed because Facebook is powerful, but I interpeted this the other way around -- "Facebook is a popular blue website, and maybe did some stuff, but who cares? There are lots of websites."

I agree that if they brought the case they should have had an argument, but it's less clear that they should have brought the case, or that size was an issue.


Op said Weak case... Right at the beginning of their comment.


Yes but the question is that is there even a “stronger case” or is any case made weak due to the possibility of there being no case.


> Not sure what the FTC's game plan was going into an antitrust fight without a market share pitch.

Maybe their plan was to lose to destabilize any later lawsuit which would have had a reasonable chance of winning?


Hanlon's Razor

Never attribute to malice that which can be adequately explained by stupidity.


I've seen far too much malice feigning stupidity to ever take this concept seriously. There's a lot of stupidity, but there's also a lot of corruption parading around as stupidity.


Fundamentally I would argue that this conflates malice and greed. They may be bedfellows, but aren’t necessarily the same thing.

Regardless, this still wouldn’t break Hanlon’s Razor because when you have enough information to adequately explain corruption so devious that it has been intentionally dressed as stupidity, it is rarely explained adequately with mere stupidity.


I think that not all things can be sufficiently explained by stupidity no matter how intenslt people attempt to feign it.


Also, malice is inherently stupid.


If an action can be adequately explained by stupidity but requires more assumptions than explaining it via malice does, then accepting Hanlon's razor would be in violation of Occam's razor.


I wonder though if it needs to be malice or simply lack of will / motivation. If you have pressure from both sides (and the politics that initiated this) it can really kill any motivation to really dig and and do your job. Combine this with all the turbulence in federal gov positions, it might just feel like a total shit show to work there and some people may just putting in their time for the pension or w/e.

A lot of maybes, but I do wonder if the wheels of government are still recovering and whether the consequences of this are sometimes indirect and not so obvious. Bad management can leave waves.

TBH if I worked in public services over the last few year I'd probably feel pretty under-appreciated and it would be hard to motivate myself.


Borrowing from Wikipedia, I prefer this phrasing:

Misunderstandings and lethargy perhaps produce more wrong in the world than deceit and malice do. At least the latter two are certainly rarer.


You forget we're talking about politicians; typically you get both.


What is the razor we should use when it’s neither malice nor stupidity, but instead just an unwinnable case? It seems like way too many people think it’s easy to prove Facebook is a monopoly.


It probably would be easy to prove (or at least support the claim); it sounds more like the FTC didn't even try.


Indeed,

through I also think we might need to better differentiate between content platforms with social aspect (YouTube, TickTock), Social Networks (Facebook, Instagram?) and Messengers (WhatsApp, Signal, etc.).


Hanlon's whetstone: Sometimes it takes so much effort to be stupid, the malice is implied. Just, not necessarily in the direction you think.


Never attribute to stupidity that which can be explained by politics.


Mark Zuckerberg made some substantial (100s of millions I’ve read) donations to the DNC and proxies. It would be surprising that they would then almost immediately try to destroy his company. A quid pro quo is pretty believable.


Positive way of looking at it: Warning to political enemies/litmus test to see how court will respond

Negative way of looking at it: Virtue signaling/needing to appear to do something/campaign donation solicitation


If you think about Facebook the consumer platform, it has a high market share, but there are a lot of competitors in the space. Social content site competitors include TikTok, YouTube, and Reddit. Messaging app competitors include iMessage and even SMS.

Facebook the business (selling ads) is a large business but the largest advertiser is Google, so they aren't even the leader.


Of all the big tech, Facebook seems like the least monopolistic to me. They have a totally different set of issues (ones that we may not have laws to deal with yet), mainly around having disproportionate power over society and the psyches of individual citizens. But "monopolist" feels like a pretty weak case.


Everyone's trying to shoehorn tech into existing frameworks because they know passing new laws is too hard. As the judge pointed out though, you can't just make shit up and expect to get away with it.


We really need new laws, because the judge is right, most of these tech companies are just not monopolies. Google excepted.

When it comes to FAANGs, in what world does Apple or Netflix have 85%+ market share? It's a ridiculous argument. But if you create a privacy law with draconian penalties, it's easy to show that most of these companies share data.

In my mind, new privacy laws are the way to go. Strong privacy laws would stop most of these companies in their tracks. How many times do activists need to be laughed out of anti-trust courtrooms before we get the message that it's a route that probably won't work?


> When it comes to FAANGs, in what world does Apple or Netflix have 85%+ market share? It's a ridiculous argument.

The bar isn't 85%+, it's significant market power, which may be 60%, and could be less depending on the specific conduct and facts. Apple has something in that range in mobile phones in the US (but not in many other countries), so there is probably a real question of law on what the market is precisely, and what % is needed to show significant market power (as well as what Apple conduct, if any, is prohibites) as well as a question of fact regarding the specific market share controlled by Apple. I dunno, maybe they have a high market share in smartwatches too.

I don't think Netflix currently has significant market power, and the streaming market doesn't seem to have significant barriers to entry; everybody and their dog in the media business has launched WhateverPlus in the last few years to some success. That would be a hard case to make.


> Apple has something in that range in mobile phones in the US

Apple has around 49-51% of market share, with the rest being Android. This is no where near monopoly power.

https://www.statista.com/statistics/266572/market-share-held...

>I dunno, maybe they have a high market share in smartwatches too.

Nope, around 35% globally, similar US.

https://www.counterpointresearch.com/global-smartwatch-shipm...

Neither of these is large enough to likely bring a monopoly argument. I've looked over the years at cases and what is generally needed, and none have ever went anywhere with such small numbers.


Don’t forget that monopolization is not the only possible offense. Anti-competitive behavior is also an offense.

Amazon, Facebook, and Google (especially Amazon and Google) have demonstrated all sorts of anti-competitive behavior. That’s different than privacy invasions, although there’s some overlap with advertising it’s not a complete overlap.


Good luck passing new laws in a country where:

1. the legislative bodies aren't designed to represent equally the population being governed

2. the vast majority of political spending comes from the wealthiest people & corporations

3. there is no correlation between the views of the average American and what gets passed as policy.


I think there is an issue with 'platform monopolies'.

There are really only 2 major players for smartphone apps, and that's incredible power.

It may not be so much an issue of monopoly but simple regulatory concerns over value chains.


> it's easy to show that most of these companies share data

No, it's not. Mainly because most of these companies do not share data directly. Even GDPR doesn't really do anything much to curb the power of these giants.


Sorry, half of humanity has an account on Facebook or one of its satraps, numerically speaking. It is the singular only social network one can always find nearly everyone on. There is nothing even remotely close to comparable. Tiktok has some people lip syncing in the mirror to pop songs, I don’t know about local community centers tiktok profiles, sorry. Facebook is inevitable for doing literally anything in this world. It’s like linked-in but for realz. Facebook? (Inter) nationalize it! (How would that work. Interesting concept, turning something over to the world as community property)


Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products.

Now everything is extremely differentiated so it's hard to find any products that are clearly competing apples to apples. The markets of these things overlap funnily such I almost wonder if the graph of "quasi-competing" products is fully connected.

-----

The institutional power of these firms isn't just in the things they sell. It is also in people's dependence on the non-fungible free services, etc.

We do need new laws so issues with the courts in some sense are good to force the issue.


> Traditional notions of market share were companies selling commodities (oil, rail travel) with undifferentiated products

This is not correct. Market shares are perfectly well defined and understood in the differentiated products case.

Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized?

The FTC failed to come up with a good market definition here, among other problems.


> This is not correct. Market shares are perfectly well defined and understood in the differentiated products case.

Yes, we do know more about https://en.wikipedia.org/wiki/Monopolistic_competition, but clearly many industries are extremely consolidated. Are you saying existing anti-trust law is good enough and we simply need to start enforcing it?

> Indeed, it is precisely the fact that products are differentiated that makes market definition an important part of nearly every antitrust proceeding: where should the market start and stop? What market is being monopolized?

Well with my second part, I was trying to get towards the relationship Facebook and Google have with their users, which does not involve money by being exchange by and large, probably couldn't be characterized in a way that would please the court. Indeed, perhaps it would be hard to characterize it as a market in the traditional sense at all.

> The FTC failed to come up with a good market definition here, among other problems.

Indeed the FTC's move does look bad based on what the court is saying, but I am skeptical that they would be able to do sufficiently better to win something big --- which is breaking up big companies. (Fines will never cut it.)

That some of the recently drafted laws are seeming written to hit tech and not other large firms is also disappointing.


Surely these companies are advertising platforms selling attention?


Absolutely. But isn't like one can trivially redirect part of an Instagram addiction into a YouTube one based on which company one hates less each morning.


The more I think about it, the more I'm convinced the issue should focus on the effect a monopolistic company has on competition and new entrants.

If a company is in the sights of Facebook, and could be acquired .. they should stand to benefit from any legislation put in place.


> they should stand to benefit from any legislation put in place.

Keep in mind many startups don't want to do the work of becoming an actual sustainable company, and rather have the higher values of the acquisition market.

Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all.

I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech.

The fact is software wants to be free, and free software wants to be funded by something other than profits. But I don't think our courts or legislatures are willing to grapple with this truth. And so we will waffle and keep the monopolies intact.


I think you're setting two very different concepts at odds with each other

Many startups aim to become acquired, because there is no alternative. It's the only viable route to success. Continue 'feeding the beast'.

This isn't a desirable scenario though .. we all know that there are political, social and economic consequences to allowing monopolistic behaviour to carry on unchecked.

The best reason for introducing legislation is to improve life for a huge amount of people.

--

> Also keep in mind that a more fragmented digital ads market without the total surveillance from monopolies might not be very profitable at all.

Then we should fully do away with those markets.

Regulation sets a bar. It stops the worst problems associated with unregulated capitalism from taking root and prospering.

--

> I don't think a disaggregated private sector is capable an entirely filling big tech's vacuum. I also don't think that is a reason not to break up big tech.

I agree, it's not a reason to _not_ break it up.

I also agree it won't be business as usual; nor should it be.

There's a pragmatism to open standards and free software that works well with capitalism.

We will need to embrace open standards to provide interoperability between products once they're split.


> This isn't a desirable scenario though

To some founders, maybe? But the fact is fewer acquisitions will mean more outright failures, if also more a few massive successes. Investors might not like that.

It will take time also for the number of starts to break through and chip away at monopolization, until that happens, we have a "worst of both worlds" where monopolies still crush you but you also can't sell out. That will definitely not be popular.

> Then we should fully do away with those markets.

I fully agree, but so many popular things are dependent on advertising, I worry the politicians have no guts here. If people just loose all their free entertainment heads will roll.

I think the best way to fund art / entertainment is UBI and crowdfunding, but that's a massive shift that, again, takes a lot of guts.

> I also agree it won't be business as usual; nor should it be.

:)

> There's a pragmatism to open standards and free software that works well with capitalism.

Actually I think those have a very awkward relationship with Capitalism. On one hand, sharing ideas is clearly more efficient, on the other hand, they undermine the competition that makes capitalism work.

There was a lot more systems innovation in non-micro-computers before Unix, by virtue AT&T limited in how they were allowed to capture the value, predominated. Then Linux also wiped out all the proprietary Unixes to a large extent.

The biggest thing attacking the stagnation of OSe might be the the increasingly bespoke cloud platforms. So basically FOSS gets in a "no profit to be found here" rut in a sub-sector, until a bunch of proprietary things the exist mainly but to increase switching costs get us back to "proprietary diversity", and the process repeats.

A stupid take mean anti-trust means banning FOSS too, kind of like how the sherman anti-trust act was used against unions. A better take might be we need something other than competition for profits to push FOSS forward.


Thinking of Facebook merely as a consumer platform seems overly broad to me. Each of those are social networks, but they fill a particular niche in the social experience. YouTube is for asynchronous videos from people you generally don't directly know, Reddit is for pseudoanonymous communities, etc.

Facebook's niche is in one-to-many communication with people you directly know. It's also arguably one of the stickiest forms of social network because of the strength of its network effects. There is very little real competition in that niche.


Finding niches is how competition happens. Another term for it is market differentiation. Even if two products/companies start out identically, they quickly diverge somewhat.

Pepsi doesn't copy Coca-Cola's marketing about being a sexy/mainstream drink, they create their own niche of being for younger independent personalities.

When people choose to get their viral news from Reddit rather than Facebook, or their viral videos from YouTube rather than Facebook, that's competition period.


> Another term for it is market differentiation.

Companies differentiate products to avoid competition. It’s marketing 101.


But... they're still competing.

You don't think ballpoint pens and gel pens compete with each other?

Just because the consumer gets more choice doesn't mean they're not competing.


The difference between Coke and Pepsi is marketing and flavor, but they directly compete in the same market. The products they have are virtually the same, only minor differences.

The product differences between, say, Facebook and YouTube are night and day. You wouldn't add an acquaintance on YouTube and start messaging them through that platform. I'm not sure you can even message people like that on it anymore. But you can on Facebook. They're fundamentally different products, they only align because they both have some sort of social aspect to them. Kind of.


I'd look at it a different way: "Facebook" and "YouTube" aren't single products, but rather each one is a collection of something like 10-20 products that live on a single platform.

For "viral videos", Facebook and YouTube (and Reddit) absolutely directly compete in the same market.

For "educational videos", YouTube competes with other platforms.

While for "tracking social acquaintances" Facebook competes with the Contacts apps by Apple and Google, as well as other messaging apps.

Really there's no such product category as a "Facebook" or a "YouTube". And Facebook's original product category -- to keep track of social contacts and post public and private social messages -- is now only a tiny part of Facebook.


This is a matter of perspective. Being intimately familiar with the differences between YouTube and Facebook, you can point out many differences. I'm sure if you were a food scientist or food marketing exec you could point out many difference between different soft drinks. These differences are market differentiators, not evidence of being in an entirely different market. Outside of the tech sphere, people see social media as a monolith in the same way that you see the soft drink industry.


Facebook and YouTube are both in the market for users to show advertising to, and generally every minute spent on one is a minute explicitly not spent on the other. If facebook were selling communication with friends, then YouTube would not be a competitor, but that's not Facebook's business, nor would anyone argue that Facebook has a monopoly on talking to your friends.


Hacker News is a monopoly in the social-news-aggregator-with-a-tech-focus-along-with-other-interesting-content-and-strong-moderation-space. dang better watch out for the FTC.


You can define any company as a monopoly if you dig deep down enough through market segments and features.


That argument goes the other way as well, you can construct every company as being not a monopoly by painting the market segment broad enough.

I don't think this is a valid argument.


At least in the cases of Standard Oil and Bell, you would have needed to define the markets as energy and communication (including the post office) for them to not have had near total control.

You could state the generalized product they sold and their total control was evident.


How is "communication" not potentially as broad as "Social media platform"? Basically every form of digital communication falls under the banner of social media platform these days. (The GP comment cites Reddit, YouTube and SMS—as diverse a set of websites from Facebook (while still being communication-focused) as I could imagine)


It is exactly a valid argument. The points you and the parent comment are making are the very heart of the issue in horizontal merger and monopolization cases: what is the relevant market?

Draw it narrowly (I.e., convince the judge to accept a narrow market definition) and making the case against a merger or in favor of monopolization becomes easy. Convince the judge to draw it broadly and it becomes much harder to stop a merger or to make a monopolization claim.


You are misunderstanding me. Yes the issue is exactly about where to draw the line. The parent's dismissed statements that facebook is a monopoly by saying "you can make every company a monopoly if you make the category narrow enough". My argument is exactly what you are saying, you can not dismiss the statement "facebook is a monopoly" by saying "every company is a monopoly if we make a narrow enough category", you need to actually make arguments (and convince the judge) why the category should be this narrow/broad.


If you keep narrowing the focus down, every product becomes a monopoly on its functionality?


Why are you separating Facebook, the consumer platform, and Facebook, the business, from each other? Neither can exist without the other, because they are the same business.


No matter which part of Facebook you're looking at it's not a monopoly.


I never said it is. I pointed out that your distinction is artificial and incorrect. You cannot separate the consumer and business portions of Facebook from each other.


Ok


If the user demographics are significantly different when are they actually competitors vs. an entirely different market?


Wouldn't counting Google as largest competitor actually strengthen the case? Those two companies did have their share of questionable, competition limiting backroom deals that leaked into the open.


> If you think about Facebook the consumer platform

Facebook is not mainly a "consumer platform" (if at all).


3 billion users probably disagree.


Hypothetically, Facebook has a monopoly in social networking, but then they decide to launch a roblox clone tomorrow. Since they have a new product line where they don’t have a monopoly, we should look the other way? It’s true that Facebook exists in many spaces where they are not dominant but that does not diminish their dominance - in fact it’s their platform dominance that makes them so dangerous to smaller companies in other spaces.


I honestly think that the idea that social networking is monopolizable is absurd.

There are billions of online person to person interactions that happen outside of Facebook. There are hundreds of thousands of websites and communities that allow communication, discussion and sharing of user generated content. There are hundreds of thousands of online spaces that provide an outlet to augment a message.

So if anything, regulators should start by redefining what's a monopoly because the current definition clearly doesn't fit the classic narrative around monopolies.


You’re commenting on a thread about reality, not a hypothetical, where the judge specifically called out reasoning such as yours that argues Facebook is a monopolist without defining terms or making concrete market share arguments.


> but that does not diminish their dominance - in fact it’s their platform dominance that makes them so dangerous to smaller companies in other spaces.

You have to demonstrate somehow that the dominance exists in a rigorous way.


Saying Facebook and YouTube are direct completion seems like a huge stretch. Google made G+ specifically because as Far as Google was concerned it lacked a direct Facebook competitor.

In what way can consumers substitute normal use like sharing photos with family members on Facebook with YouTube?


They are absolutely in competition, Facebook video content is massive and there is a ton of video content accessible only via Facebook. If there is any doubt, jump on Facebook and start scrolling through their video section.


Microsoft and Nintendo are in competition, that doesn’t mean Nintendo in in the office productivity market.


They are both in the video game console market though...


As a literal answer to your question, here's how to post photos on YouTube: https://support.google.com/youtube/answer/7124474

But if I understand correctly, determining whether two companies are competitors is more about their markets, rather than their feature sets.

From the ruling text:

> Although the precise definition of a “Personal Social Networking Service” is disputed (as that is the market in which Facebook has its alleged monopoly), it can be summarized here as one that enables users to virtually connect with others in their network and to digitally share their views and experiences by posting about them in a shared, virtual social space.

YouTube would fit that definition.


> YouTube would fit that definition.

Then it’s a bad definition. Who organises family gatherings on YouTube?


Then propose a different definition. If we define it as "people uses it to organize family gatherings", then instead of YouTube you have iMessage, Discord, heck even SMS and email.

The challenge here is there isn't a single market definition that would fit. It's up to the plaintiff (FTC) to allege a coherent definition, and it sounds like in this case they just neglected to do so.


That’s not even vaguely the same thing.

Still if in your opinion YouTube was a “Personal Social Networking Service” then why do you think Google have made G+?


It's not my opinion, it's what the court said in plaintext. YouTube undeniably: "enables users to virtually connect with others in their network and to digitally share their views and experiences by posting about them in a shared, virtual social space."

Competing on features != competing in a different market. Feature sets and markets are two very different things.

What definition would you use to define Facebook's market?


Features define the market.

Spray paint manufacturers aren’t in pen market even if you can “recorded text and images in a durable fashion with them.” Lighting a couch on fire sure produces a lot of lights but couch manufactures are not part of the home lighting market.

EDIT: But let’s ignore that. Sure, YouTube has roughly the share of social networking market as the number of people posting vacation photos on it. That might just add up to 0.0001% market share.


If you define the market as [the previous definition] + [photos], Facebook still has significant competitors.

I can’t think of any definition that would only apply to Facebook that isn’t so narrow as to be unprecedented as a definition of an entire market.

Bell was “telephone service”. Standard oil was “oil”. What’s a comparable definition for the market that Facebook is in?


I would suggest the overlap between Facebook and G+ is a reasonable definition for broad real life social network for communicating with real world fiends, family, and social activities. LinkedIn, Patron, Reddit etc have related features but are designed for different kinds of relationships and types of communication.

Arguably Instagram in April, 2012 was a reasonable pens vs pencil division where the courts could have included or excluded them quite reasonably. Though allowing Facebook to buy them suggest a vary narrow definition at the time.


By that vague definition, any app/site with UGC is a personal social network which is not a very useful definition.


A definition seems hard to come by. I've been informed here in the past that Hacker News is a social network too. It's not implausible to me, since it's a site where you can comment about stuff, just like Facebook.


You're implying that Google wouldn't bring out two or more products in the same space? The same Google that releases a new messaging app on Android every quarter?


Facebook the ad business is the monopoly.

What really needs to happen is to amend monopoly definitions in cases where a captive market is present.

The issue with Facebook isn't that they own 100% of the ad market, but that they control 100% of the Facebook ad market, which is itself large enough to constitute monopoly concerns. (As with Apple and Google app stores)

Advertising is trickier than apps in terms of separation, but my gut says things would be better if companies with large captive market share were required to wholesale ad space and targeting via standardized mechanisms.

And were specifically prohibited from developing any kind of value add ad products on top of their platforms.

Just too much conflict of interest.


> isn't that they own 100% of the ad market, but that they control 100% of the Facebook ad market

You need to define these terms in a way that doesn't make everything a monopoly. Because by this logic, my corner flower vendor has a monopoly on her corner and also on the flowers she is holding in her hand right now.


I think for a monopoly to exist, a single private entity needs to wield significant power over the conditions within an economic market; to the significant detriment of other entities which are also economically dependent on that market.

Regulation helps capitalism work for more people, and keeps our society healthier. It's a good thing.


> within an economic market

We’ve looped back to that term. What is an “economic market?” Precisely? In a way that makes the law grounded, predictable and extensible.

I’ve struggled with this, too, by the way. The courts have as well.


I don't think it's nearly as complicated as you fear it is.

However, I do think there is a lot of money depending on making the situation as complicated as possible — especially in the US.

The fact the EU is managing to progress this type of matter, proves it's possible.


> the EU is managing to progress this type of matter, proves it's possible

Is it? The European Commission has no theory of a market, just an enemies list. It has never once in court sustained a succinct pitch on how to define a market for antitrust purposes in a way that snares big tech. Once in a while it settles for a fine and everybody moved on.


In my opinion, the EU doesn't rely on litigation to define the economic landscape in the same way that the USA does.

Catching out these corporations in order to lay a 'charge' shouldn't be necessary, when it's quite clear to most people that their behaviour is stifling competition.

We simply need to implement the necessary legislation to enable a playing field which is able to serve a greater range of players.


> We simply need to implement the necessary legislation to enable a playing field which is able to serve a greater range of players

“We simply need to implement the necessary legislation” could be said about literally any problem. The EU has this figured out about as much as the U.S. does.

> the EU doesn't rely on litigation to define the economic landscape in the same way that the USA does

The courts have been snubbing the European Commission’s expansive views of antitrust. In part due to a lack of any consistent definition of a market.


Well, I really hope these problems are solved iny lifetime.

I find it maddening to see the corporations run rings around elected governments!


> We simply need to implement the necessary legislation to enable a playing field which is able to serve a greater range of players

“We simply need to implement the necessary legislation” could be said about literally any problem. The EU has this figured out about as much as the U.S. does.


Submarkets over a certain size, controlled by a single party


> Submarkets over a certain size

This moves the problem of defining a market to defining a submarket.

Please don't interpret this as my being facetious. In the days of good and services being sold to consumers, we had metrics to measure this. The government measured and the courts incorporated said metrics into antitrust law. Those measures don't work well in the digital era. These cases are about proposing new measures and getting them to stick.

Mind bogglingly, the FTC didn't propose such a metric. That's why its complaint was dismissed. I'm curious to see what they propose, if anything.


The submarket of Walmart shelves? This would basically ban any business that sells goods/services from going beyond a certain size.


A fair point, because Walmart, Target, CVS, Costco, etc all vertically integrate and sell their own (often whitelabeled) products on their shelves, alongside other companies' goods.


Large retail stores are an interesting example.

In that case, the core product (to other businesses) is shelf space.

So is there a monopoly on shelf space control?

Walmart is huge. But Target's pretty big too (~10% their size by revenue). And they've got bigger competitors in grocery.

But in the Facebook case, where else are you going to buy eyeball time? The closest thing to the scale of Facebook ad space would be if Google put ads on the launcher of Android.


Like the “submarket” of Costco & Costco’s shelves?


> Facebook the ad business...

- that is not the case the FTC tried to bring before the judge, so it’s not the issue here.

- if the FTC had tried to bring that case, Facebook would have (correctly, IMO) pointed out that the advertising market encompasses print, television, radio, direct mail, and online. Even in online it faces competition from (at least) Google and Amazon, among others. I think the FTC would definitely lose a “monopolizing online advertising” case handily.


Advertising isn't a market.

Advertising to Facebook users is.

Because Facebook has ~2.5B daily active users using at least one of its core products.

At some point, you're big enough that you create your own markets. And should be looked at as such.


"The issue with Facebook isn't that they own 100% of the ad market, but that they control 100% of the Facebook ad market, which is itself large enough to constitute monopoly concerns."

This is downright absurd -- you're a monopoly because your company has customers?


You're a monopoly because you control access to a significant amount of customers.

So either you can not control access to as many customers by splitting your customer base. A la Ma Bell.

Or you can keep your privileged position and accept regulation. A la utilities.


So basically FTC got lazy and instead of filing proper complaint with data and proof of alleged FB monopoly, they filed something like "Dude, you know FB is kinda monopoly and stuff, right? That's not cool, dude!". Which is basically means they had one job and they couldn't do it properly. We're living in a strange situation where federal government has vast powers but it's too incompetent to actually use them.


Not lazy, "strategic". Someone will run for office or political appointment and use this (failed) case to prop up their "strong stance against the tech aristocracy." The complete lack of merit or critical thinking will be conveniently left out of the sound bites.


Or they simply got bribed.


Woah, woah, woah, surely you mean multi-million dollar campaign contributions were made. Bribery is a dirty word.


There is probably not a clear precedent in relevant markets so it is quite possible that they put forth a case to see where the bar is.


One important thing to call out here is that even the above two points don't actually matter in the final dismissal. Ultimately, it boils down to something simple: time.

The FTC had nearly a decade to bring something up and it didn't. This ultimately is problematic because Facebook would look at this and clearly see the FTC had no problems with its actions. So to look at Facebook's conduct in the time that has passed is ultimately unfair to Facebook. Since its actions since would have been seen as being compliant.


Pages 50-53 are actually about why the court doesn't consider it a valid argument against the case, including precedent against the argument.


MySpace is alive and well! Come back to Tom!


I think this is a good TLDR from WSJ:

> Judge Boasberg said the FTC’s lawsuit was “legally insufficient” because it didn’t plead enough allegations to support monopolization claims against Facebook. The judge, however, said the commission can try again and gave it 30 days to attempt to file an amended lawsuit.


This makes me wonder if they purposely submitted a weak case to appear proactive for political purposes, while knowing it would be tossed out. There is a lot of money that flows from big tech into the political coffers, so you have to be careful to not rock he boat too much.


Unlikely. High ranking government lawyers usually don't just put on cases to appease the donors of the executive. These are high-achieving, career-driven people. They want to win.


Someone still “wins” if they exit the FTC and immediately receive a highly paid lobbying job. The reality of the situation indicates that OP’s idea is likely, actually:

https://www.citizen.org/article/ftc-big-tech-revolving-door-...


OP's idea is that the FTC punted this at the direction of an elected official who gets campaign donations from tech companies. It does not follow that because the FTC has a revolving door problem (which it definitely does), there was executive pressure to punt. Furthermore, FTC officials tend to work at corporations primarily because they are among the most knowledgeable and well-connected people in the space, not necessarily because there is some kind of slow-acting quid pro quo here. It's still a problem, but it's not really analogous to the idea OP had.


> This makes me wonder if they purposely submitted a weak case to appear proactive for political purposes, while knowing it would be tossed out.

I think its more likely that they were confident that what occurred (complaint dismissed with leave to refile) was the worst they would get, and the best case was that the court would accept the weak and easier to prove claims as sufficient fact allegations to support the case.


> There is a lot of money that flows from big tech into the political coffers

It apparently wasn't enough to prevent Lina Khan's appointment. She's not particularly industry friendly, and I suspect that the FTC will file the amended complaint in this case.


I wouldn't be suprised that FTC is just a friend. I mean it's year 2021, they already figured this out in the 19th century.


It's certainly plausible. I wonder how many of our institutions are really "just for show," like the TSA.


What if we replaced the whole anti-monopoly/pro-competition apparatus with a sign that just said "Everything is fine, this is the market working as intended."?


> What if we replaced the whole anti-monopoly/pro-competition apparatus with a sign that just said "Everything is fine, this is the market working as intended."?

"This is the market working as intended," does not imply "everything is fine."


The FTC gets another shot at that, and can probably prevail at this level in the next round.

Challenging the acquisitions, though, came too late.


At the very least they need a plausible market definition, which is not easy.

They also need a theory of harm to consumers from facebooks supposed monopolization of whatever they decide the market is. That’s going to be extremely difficult when the product is free.

I would not have allowed them to buy Instagram or WhatsApp had I been in charge but the monopolization claim they are trying to make is not that convincing.


From the opinion, internal citations omitted:

> The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Services. The Complaint contains nothing on that score save the naked allegation that the company has had and still has a “dominant share of th[at] market (in excess of 60%).” Such an unsupported assertion might (barely) suffice in a Section 2 case involving a more traditional goods market, in which the Court could reasonably infer that market share was measured by revenue, units sold, or some other typical metric. But this case involves no ordinary or intuitive market. Rather, PSN services are free to use, and the exact metes and bounds of what even constitutes a PSN service — i.e., which features of a company’s mobile app or website are included in that definition and which are excluded — are hardly crystal clear. In this unusual context, the FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague “60%-plus” assertion too speculative and conclusory to go forward.

https://storage.courtlistener.com/recap/gov.uscourts.dcd.224...

The court also threw out the similar argument from 46 States (and in a way that the States are unlikely to recover from):

> First, the States’ Section 2 and Section 7 attacks on Facebook’s acquisitions are barred by the doctrine of laches, which precludes relief for those who sleep on their rights. Although Defendant purchased Instagram in 2012 and WhatsApp in 2014, Plaintiffs’ suit — which seeks, in the main, to have Facebook divest one or both companies — was not filed until December 2020. The Court is aware of no case, and Plaintiffs provide none, where such a long delay in seeking such a consequential remedy has been countenanced in a case brought by a plaintiff other than the federal government, against which laches does not apply and to which the federal antitrust laws grant unique authority as sovereign law enforcer. If laches is to mean anything, it must apply on these facts, even in a suit brought by states.

https://storage.courtlistener.com/recap/gov.uscourts.dcd.224...

Relevant to both suits, the Court separately found that the argument that Facebook violated antitrust law by revoking API access for other apps that duplicated Facebook features lacked merit (the policy is not a violation of antitrust law) and came too late (the implementation when they revoked access was years ago and there is no ongoing misconduct).



The court says that the FTC didn't factually establish that Facebook has sufficient market power to qualify as a monopoly (as I understand it).

In a certain market, Facebook + Instagram have great market power, but it depends on how you define the market. I'm curious if anyone has done it, maybe financial analysts, and how they define it:

* If the market includes public messaging, such as Twitter, then Facebook's power is relatively much diminished.

* If the market includes public forums, such as Reddit, HN, and every phpBB board, then it's hard to say Facebook controls monopoly power.

* LinkedIn provides similar service to professionals

* Where does Pinterest fit? TikTok?

Part of the problem is that Facebook competes in all these markets. In which one(s) do they have a monopoly and how are they defined? 'Personal user page + social communication'?


This whole conversation becomes a lot easier if we realize that two things can be true:

1. Facebook has an uncomfortable level of power in advertising, eyeballs on screens, and proprietary data

2. Legals definitions that were created over 100 years ago mostly focused on price gouging are not going to address this neatly


The whole conversation is a lot easier if you just define Facebook as a monopoly.

#1 is assuming the argument, really. #2 is stating that old law doesn't work and implying we need new law to let us do what we want...again, assuming there is a problem, making no attempt to determine whether there is a legal problem


It's not the job of the judiciary or the FTC to create new laws. If Facebook is not violating current laws there's nothing for them to do, it would require new legislation.


Point 1 is a dubious complaint. There are other companies with significant presence in "advertising, eyeballs on screens, and proprietary data". Facebook is far from having a monopoly on this. Furthermore, it is far from clear what demonstrable consumer harm is taking place as a result of this "uncomfortable level of power".

To point 2: monopolistic behavior resulted in consumer harm and clear negative impacts on the wider economy. The original laws have been reinterpreted for a variety of modern cases (see - antitrust case against Microsoft).


Facebook doesn't have a "market" in messaging or social networks. To be fair they don't sell messaging or social space.

Facebook's "market" is advertising in which it isn't the leader.

I guess it would be hard to prove a monopoly on something you don't even sell.


One needs not "sell" anything to have a market share. For example, Google's market share in general search services can be defined as the number of queries made on Google as a share of all queries made on general search engines. Facebook's market share in messaging could be defined in terms of messages sent. That would of course be difficult to measure, but nonetheless that is still a framework to think about market share in messaging.


> messages sent...

do you have a moment to talk about our lord and savior email :D


I don't disagree, but just because something isn't sold for >0 money doesn't mean it isn't in the market. Google is very much in the "search" market even if they do not make revenue directly from you the end customer making the search.

Giving something away for free and monetizing something else still means you are in that market.


> Facebook's "market" is advertising in which it isn't the leader.

What are the alternatives for social ads? Google is a different kind of ad service , kind of like billboards vs tv


Twitter, Quora, Reddit, LinkedIn, StackOverflow, Youtube, etc.

Google's display ad offerings may not be directly social, but their Adx and Adsense ads are shown across most forums and long-tail social channels, including Reddit and StackExchange. Lots of competitors in the social ad space.

Facebook is large, and might be the largest, but it's not fair to say that Google is an entirely different type of service. Hell, Google even offers native ads a la Facebook through their "Discover" ad product which serves across all their various social feed channels like Gmail, Youtube, and Discover feeds.


No, the court says the FTC didn't allege that Facebook has sufficient market power to qualify as a monopoly. Factual determinations come later in the process.

The court dismissed the pleading document (the initial complaint) due to its inadequacies but not the case itself, which means that the FTC can file a new complaint with more detailed allegations.

The rough order of civil procedure: the complaint, where the plaintiff(s) makes allegations of fact and law about the defendant party (or parties). This is followed by discovery, where the actual fact-gathering occurs, then usually a motion for summary judgment adjudicated on the facts acquired during discovery, and finally, a trial on the merits (unless the parties settle first).


Thanks. I'm glad I included a caveat about my understanding! To be clear, are you an attorney?


Yes, though with the caveat I no longer do civil litigation.


If the WhatsApp merger is in question, the FTC would have to define the market very broadly. I don't think there is any case to be made that FB has monopoly power over the messaging market, so I don't think they are likely to succeed.


Your comment gets to the heart of the issue in cases like this and related horizontal merger cases: how broad is the market?

If Facebook convinces the judge to accept a broad market definition, game over for the FTC.

If the FTC convinced the judge of the reverse, bad news for Facebook.

The judge has basically told the FTC that they did a terrible job exactly on the market definition issue. This is a big problem for them.

I also don’t see why a judge wouldn’t accept something like “online communications platform” as being the right market in this case. Then all of the players you list are plausible competitors and the FTC’s job becomes much harder (or IMO impossible).


> I also don’t see why a judge wouldn’t accept something like “online communications platform” as being the right market in this case

Because lots of things that could be described as “online communication platforms” are probably fairly simply demonstrable to not participate in competitive substitution, and as such arr not direct contributors. I mean, HN is an online communications platform, and so is GMail, but if service on HN is bad, I don’t think people move from HN to Gmail.


I dislike/hate facebook. I have no idea why anyone thinks they have a monopoly. I use social services just fine without FB services


If the lawsuit were in Brazil, it would be clear: It is impossible to access a majority of services without Whatsapp. Most phone numbers / chat services have no alternative except through Whatsapp, even in the administration.


What does that mean?

I never used WhatsApp for anything but chatting with my family


What kind of “majority of services”?


Until they start charging for WhatsApp that would still be totally legal.


I haven't read any of the court documents, and even if I did I probably wouldn't understand most of it because I'm not a lawyer.

But... Facebook has engaged in anti-competitive practices in the past and continues to do so today. I agree that just calling them a "monopoly" isn't very helpful, because they're a big company involved in many different markets.

Most people hate Facebook nowadays, but their anti-competitive behavior is not one of the top 3 reasons (probably).

I think if people focus on this single question: "Is <company> immune to competitive forces in <market>?", then the question of should we regulate/how should we regulate/etc becomes much easier to answer.


Most people don't hate Facebook nowadays. Or did you mean to add "on HN and reddit"?


Check out https://accountabletech.org/media/polling/ - the majority of American voters believe that Facebook does more harm than good.


Not using their platforms is a solution to many fb problems. But is there a solution using fb? A crowdsourced fb campain with ads targeted at ambivalent fb users urging them to leave the platform comes to mind.


Change your profile pic into "FB is bad".


A few sentence summary of the ruling: Be rigorous. Justify your claims. Don't get carried away by political motives. Law trumps over politics.


> For the foregoing reasons, the Court will grant Facebook’s Motion to Dismiss, but it will dismiss without prejudice only the Complaint, not the case.

This isn’t nearly as big a deal as the headlines make it sound. The judge told them to rewrite the complaint with more specifics.


On the other hand... why would the FTC submit a crappy first draft on a major case?

I don’t expect they actually have a great market definition somewhere on their computers just waiting for the judge to reject their first complaint.

This is not an easy case for them.


How much effort would you put into a major project if your boss had two weeks left on the job and your new boss was likely to want a wildly different approach to the issue? And what if your outgoing boss was ramping up the pressure to finish it ASAP for personal reasons?

I think I’d understand if whatever you handed in maybe wasn’t your best work under those circumstances.


Unfortunate, but per nthe article it looks like the FTC dropped the ball by not providing enough specificity in it's claims and assuming the court would agree that Facebook is a monopoly prima facie.


Because the FTC can't without shooting itself in the foot. If the FTC defined a monopoly as widely as Ms.Khan did in her Yale Law Review paper, it would alienate the entirety of the F500 and create a constitutional minefield. The case might be litigated for a few years but, ultimately, the charge of being an illegal monopoly, along with any argument built upon that, would be dismissed. What the agency probably wanted to do was send in the most general and inoffensive claims first and amend as needed.


By far the best reporting on this I've found is Matt Stoller here: https://mattstoller.substack.com/p/facebook-hits-1-trillion-...

Highly suggest a sub, he only writes about American monopoly power.


So here's an out-of-left-field question. Given what we've been saying for a while, that a Facebook user is not the customer but the product, then how would you ever prove Facebook was a monopoly the way we think of it? Is social media a "market" if no money is changing hands? The market Facebook is actually in is advertising, so you would have to prove they have a monopoly on the online social advertising market, wouldn't you? And the customers you'd be protecting would be advertisers.

And what did they accomplish by buying Instagram and WhatsApp? Well, they acquired more, not customers, but raw materials, to sell. Seems like anti-trust is the wrong way to go about it.


It's almost amusing how effective "our" government can be at pushing certain things through "their" courts, while at the same time being almost comically ineffective in other areas. Same government, same courts, different outcomes.


For the issue with the state attorneys, why is the "delay" pertinent? Is there some rule that if the states don't expect a merger to present an issue, but it then does proceed to present an issue despite expectations, that because they failed to correctly predict the future they no longer can do anything? Or is this only because their powers are limited to merger assenting and not anything further with respect to monopolies? (Obviously irrespective of the other arguments.)


> For the issue with the state attorneys, why is the "delay" pertinent?

Because laches [0], which the feds are explicitly exempted from.

> Is there some rule that if the states don't expect a merger to present an issue, but it then does proceed to present an issue despite expectations, that because they failed to correctly predict the future they no longer can do anything?

No, but there is a rule that if you had all the information needed to make a claim, but delayed unreasonably, you can’t make the claim. It bit Trump a lot in his post-election challenges to rules that were clear long before the election. Where a delay with no good cause forecloses less disruptive remedies than those sought (e.g., Trump’s delay foreclosing most remedies beside throwing out election results), that weighs in favor of laches barring the claim.

[0] https://dictionary.law.com/default.aspx?selected=1097


So they basically neglected to make any claims with recent or newer dates, or they were such a small part of their claims the court decided they were window dressing to an action they should have already taken?

I kind of take it from your comment you see a sort of wilful legal incompetence at play (particularly given your link says courts rarely apply laches)?


I hope this pushes other countries to drive fb out of their territories; they don't want a foreign entity controlling the largest share of media .


If this is not a monopoly, then I don't know what is! Facebook is a propaganda machine and all in power want to control it and do favors to it. It needs to be regulated! By default, I'm against regulation but come to Eastern Europe to see what life is like in an under-regulated world! Regulation is progress! You can't expect all players to play fair!


The antitrust case against Facebook has always seemed strange to me. If we're worried about them having too much data, isn't spreading the data to multiple smaller entities just making the problem worse?


the government doesn't want want a Chinese tiktok to take this market share.


It's such a shame that in the American culture the terms "anti-trust" and "monopoly" have become so closely coupled.


A corporate trust is a monopoly or a near-monopoly, so it is neither surprising nor shameful that the term anti-trust should be associated with monopolies.


The intent of antitrust law is to prevent anti competitive behaviour. This may include, but is absolutely not limited to, monopolistic behaviour.


Yeah, and it really is unfortunate that monopolistic behavior is the only place the US (lightly) goes after anti-competitive behavior.

ISPs are another example where they should get involved but don't. I'd love to see the US either turn the internet into a public utility or trust bust the snot out of big telcoms like comcast and AT&T.

Even now, in my local market a new fiber provider is coming to town, and wouldn't you know it, my ISP prices have dropped for the first time in years to be ever so slightly lower than this provider.


Regardless of intent, the laws themselves cover price fixing, formation of cartels, collusion which restrains trade, mergers and acquisitions that create monopolies, and monopolization. In other words, monopolistic behavior.

People falsely believing that our current anti-trust laws cover a broad range of anti-competitive behavior that they don't has likely contributed to the lack of any new competition legislation in nearly half a century.


Is the judge a facebook user? How can we trust him to be impartial?


the current administration has claimed the desire to do many things, but hasn’t followed up. I blame the mediocrity of the claim against facebook on the FTC being directed to bring a mediocre claim sure to fail, and life goes on, and everyone involved gets paid, eventually.


Lots of questions in this thread asking the obvious-yet-difficult question of "in what market / in what sense does FB have a monopoly?"

I think Ben Thompson has the analysis right here.

High-level summary: https://stratechery.com/2019/tech-and-antitrust/

Facebook-specific analysis: https://stratechery.com/2017/why-facebook-shouldnt-be-allowe...

With the key bit of analysis being (from the latter):

> Facebook, for its part, had, for better or worse, transitioned to a public app that not only handled symmetric relationships, but, at least according to perception, asymmetric broadcast as well; that, though, left an opening for an app like Snapchat. Thus Facebook’s acquisition drive: the company had already secured Instagram, giving it a position in asymmetric ephemeral broadcast apps; Snapchat rebuffed advances, so the company soon moved on to WhatsApp.

> The importance of these two acquisitions cannot be overstated: Facebook has always been secure in its dominance of permanent social relationships, a position that has given the company a dominant position in digital advertising. However, while everyone may need a permanent place on the Internet (all of those teenagers people say Facebook needs to reach have Facebook accounts), the ultimate currency is attention, and much like real life, it is ephemeral conversation that dominates. Facebook, by virtue of early decisions around privacy and significant bad press about the dangers of revealing too much, was locked out of this sphere, so it bought in.

So if we segment the markets along the lines that consumers tend to intuitively percieve, FB has monopoly over public symmetric (personal) social networking. That seems like a coherent market segment definition to me. Though of course that's a lot of qualifiers so I could easily see someone objecting that they are arbitrary/post-hoc.

As a separate point, perhaps someone with legal expertise can comment on this one - I'm curious why the FTC's complaint relied on establishing a monopoly; the Sherman Act doesn't actually require establishing a monopoly; anticompetitive conduct that attempts to establish a harmful monopoly is also illegal (e.g. see https://www.justice.gov/atr/competition-and-monopoly-single-...). It seems obvious to me that FB's acquisitions were primarily intended to acquire a monopoly (if they didn't already have one), indeed Zuckerberg explicitly stated that he was trying to prevent a competitor from emerging in the emails that were in these court cases.


> ... why the FTC's complaint relied on establishing a monopoly; the Sherman Act doesn't actually require establishing a monopoly; anticompetitive conduct that attempts to establish a harmful monopoly is also illegal...

Antitrust guy here: this is exactly related to your first point. A monopoly in what market? This is the key issue. The market definition is not obvious to me. “Online communications platform” sounds reasonable to me but that could plausibly include email, so good luck arguing Facebook has a monopoly in that.

“Online communications, photo and personal news sharing” is another good potential market. That’s even wider so now facebooks share is smaller.

The other problem: where is the harm to consumers?? They get the product for free. This is not Standard Oil or AT&T back in the old days.

If it had been up to me I would not have let FB acquire Instagram or WhatsApp for anticompetitive reasons, but the other problem for the FTC here is that they themselves did ! And not that long ago either.

I could be wrong but I doubt this case will turn into a winner for the FTC in the end.


>where is the harm to consumers?? They get the product for free.

The main angles are privacy and freedom of choice, both unfortunately seem pretty technical, plus I doubt the US government is interested very much in reducing mass data collection.


>anticompetitive conduct that attempts to establish a harmful monopoly is also illegal

I think point 3 is the relevant bit: "a dangerous probability of achieving monopoly power."

It seems like the judge is basically saying that probability isn't high enough based on their market share (that the FTC couldn't even give a good number for).


what business is facebook in


Judge makes age-ist joke? See page 8 from the court ruling: "Begin with Insta, as those in the know — viz., our children — refer to it"


We should dispel the illusionthat large corporations compete freely with each other so monopoly requires something like 75% -80% of market share.

In reality even a (consistent) 20% market share is pretty much good enough IMHO. You have a bunch of corporations, each taking about 20% and they will collude 100%.


You are confused. The law already recognizes collusion claims and they are unrelated to monopolies (as they should be)

The FTC did not plead collusion here


While I agree that large firms often collude, we do have laws against that in the U.S. In fact, I believe FAANG has gotten into trouble before for collusion on hiring practices. But those are different laws than the ones against monopolies.

I would not be totally surprised to hear that, for example, Google and Facebook collude on advertising, but I'm not at this point totally convinced of it either.


This is called 'oligarchy' and yes, it's definitely real.


Could you give an example of such a market?


Most markets are like that.

Most markets are dominated by small players that implicitly collude to keep prices up.

Investment Banking can be like that - they will never, ever give you a deal on fees. That's more cultural but it illustrates the point. There's no 'official policy' for rates and yet they won't compete there.

Credit cards will never, ever give you a break that's not out of bounds. Visa fees should be a fraction of what they are.

In Canada, we have about 7 major banks, all the rest are tiny, it's almost impossible to break in. They print profits and will not compete on fees.

This happens because we've understood oligarchy for a very long time. A CEO/PM at an institutional bank knows very well that if he lowers his price, that the immediate response by the market will be price matching and erasure of gains for everyone.

FYI this is one of the big reasons why mature industries are so slow moving.

If there are many competitors in a commodity market, this doesn't work because 'someone' will cut their prices, and profits will be reduced until competing entities can't compete or find an equilibrium.

You can generally find these oligarchic situations by looking at profits. If you're looking at an established industry of 3-7 players and they all have high margins and profits, that's usually a sign of implicit collusion because in any normal circumstances those margins would erode over time.


> In Canada, we have about 7 major banks ... They print profits and will not compete on fees.

How does this happen with 7 competitors? What stops one of them undercutting the others and winning customers? Is it that retail banking customers aren't that price elastic and there's too many frictions involved for a customer to switch?


Any market with high barriers to entry exhibits this.

Banking is very heavily regulated in Canada it's almost impossible to start a new bank. Banks have a very low churn and citizens are already banked.

The ATM system is a cabal, owned by the banks, and they get massive fees from that. That's a form of almost direct collusion and anti-competitive practice to some extent, as nobody could feasibly compete with the installed base of ATM machines.

This happens in other industries and they are smart enough to know now to reduce their prices because it will gain them nothing.

Canada is also a different place in that there is a much greater focus on stability than innovation. Canada does not have economies fluctuations that are created internally - all booms/busts are driven primarily by external/US speculative activity. Canadian consumers are risk averse, much more trusting of institutions and brands. They like 'safe, clean, well lit places with products they know and understand'. It's a actually good for civility but a big hamper on new innovation.


...And Facebook reaches $1TN market cap too.

To Downvoters: So Facebook DID NOT reach and close above $1 trillon dollars in market cap after the dismissal of this antitrust complaint? Are you prepared to refute this claim which is backed by an article which is from the SAME NEWS SOURCE as the one in this thread? [0]

Discuss.

It seems that having any sort of evidence-based logical discussion or providing links to a reliable source does not apply to this orange site and the illogical downvotes and zero replies to this comment prove this.

[0] https://www.cnbc.com/2021/06/28/facebook-hits-trillion-dolla...




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