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