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Comment by plickdixon | Hacker News Reader

From Zuck (Thursday, January 10, 2013 1:28AM) Subject: Re:Competitive Mobile App Install Ads

"I think we should block WeChat, Kakao and Line ads.Those companies are trying to build social networks and replace us.The revenue is immaterial to us compared to any risk.

And I agree we should use ads to promote our own products, but I'd still block companies that compete with our core from gaining any advantage from us. I'd also keep blockingGoogle but otherwise wouldn't extend the block to anyone else."

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These actions may look anti-competitive, but these companies are all foreign (China, South Korea, Japan). China does anti-competitive stuff to US companies all the time. I doubt there's any legal case for FB abusing monopoly powers based on this email. If anything, this is just very competent business decision making.

> These actions may look anti-competitive, but these companies are all foreign. China does anti-competitive stuff to US companies . . .

I don't think there's any exception in the antitrust laws like "but you can be anti-competitive if the other guy did it first." And anti-competitive behavior in a Chinese company can hardly justify anti-competitiveness against a Japanese company or a Korean company. They may all be in Asia but they are nonetheless different countries. Google is also not a Chinese company, as you are probably aware.

Also a note: you don't have to be a monopoly to be charged with anti-competitive behavior. Being a monopoly can raise the standard of behavior and increase the penalties, but anti-competitive behavior can be illegal on its own, aside from whether you have an actual monopoly. For more you can start with https://en.wikipedia.org/wiki/United_States_antitrust_law

I would guess foreign companies aren't protected by US antitrust law the way domestic ones are.

You seem to suggest that US companies can break the law because some other country is corrupt?

I hold "our" companies to a higher standard. I hope judges do as well.

> legal case for FB abusing monopoly powers

I think its referring to legality not standards. what law is FB breaking?

Sherman Antitrust Act

But Google isn't foreign and he explicitly says to keep blocking it?

> These actions may look anti-competitive, but these companies are all foreign (China, South Korea, Japan). China does anti-competitive stuff to US companies all the time.

I can’t believe this needs saying, but neither Japan or South Korea is China.

> I doubt there's any legal case for FB abusing monopoly powers based on this email. If anything, this is just very competent business decision making.

Facebook does business in Japan and South Korea. I’m sure they have to follow the laws of both countries.

>these companies are all foreign

Is there some reason you think they would not do this to a US company?

They explicitly mention doing it to Google.

Google has a bigger ad network than Facebook so how is that a monopoly?

Let's track the argument from the top of the thread.

> "...And I agree we should use ads to promote our own products, but I'd still block companies that compete with our core from gaining any advantage from us. I'd also keep blockingGoogle but otherwise wouldn't extend the block to anyone else."

> "These actions may look anti-competitive, but these companies are all foreign (China, South Korea, Japan)."

> Explicitly mentions Google.

> Google has a bigger ad network than Facebook so how is that a monopoly?

Do you find this statement anti-competitive: "I'd still block companies that compete with our core"?

In 2013 FB was far from a monopoly.

I don't really see this as morally objectionable (don't know about the law, am not a lawyer). It's interesting to see the perspective, though. Not sure what point you're making.

If you agree that Facebook has a monopoly on a certain kind of social networking, then this documents the abuse of that monopoly position.

Would McDonald's (afaik by far the largest of its kind) have to advertise for its competitors on request? It seems weird to me.

Secondly, they don't really have a monopoly from my perspective. I don't know many people that use Facebook-the-product for its intended purpose, that is, social networking instead of selling household items or organising ride sharing. And I don't know anyone who uses Instagram (except for one girl on the bus who looks down only enough to make sure she's tapping the post and not some other button on her screen, but otherwise only likes every post without even glancing at it). I guess that might be different in other countries.

McDonald's isn't running an ad agency alongside its main business. Ads are not a product that they sell to the public. Facebook sells ads to the public, but not to their competitors. This is almost certainly illegal under the Sherman Antitrust Act of 1890

Hmm, I guess I see what you mean. To me the ads feel like an integral part of it, like the cash/card registers in a McDonald's, but when you point it out I see it can be a separate component. I suppose it would be like McDonald's manufacturing their own registers and refusing to sell them to competitors. There are a lot of register manufacturers, and a lot of other ad platforms, but indeed on other ad platforms you don't reach the Facebook users that you want to reach, so perhaps there isn't really any other option than to run Facebook ads.

I guess I also saw it differently because it feels like a free speech argument: why does FB have to give competitors a voice? But it's not about having to give someone a voice because they claim it should be a free (as in freedom) platform, it's for maintaining competition.

I think I've changed my mind. As you see I'm still thinking this through (out loud) but I suppose it should indeed be different entities, even if the to-be-separated ad business is selling "real estate" on Facebook.

McDonalds does actually do sponsored ad deals on its meals, with tie ins to major brands. If I remember right it is legal for e.g. CBS to not run ads for ABC programs.

It's been a long time since I've watched network TV, but I can't recall EVER seeing ads for a TV show on a competitor's network.

Hrmmm - well, I remember seeing HBO ads on all the networks. But your basic point is valid.

Did people forget the most recent case of this? "Disney bans Netflix ads from all of its TV channels except ESPN". [0]

Disney banned Netflix ads on its streaming service. How is that not the same thing? The monopoly argument crumbles when you realise how big Disney is compared to Netflix.

[0] https://www.cnbc.com/2019/10/04/disney-to-ban-netflix-ads-fr...

I would say the majority of users of FB and IG are for social media. That’s why small business use them for ‘selling household items or organizing ride sharing’. I personally cannot think of another social media app as dominant as FB(including IG). If you happen to know one pls let me know.

> That’s why small business use them for ‘selling household items or organizing ride sharing’

Not organised by small businesses, it has nothing to do with any company. Just some dude(s) (or gal(s)) that run(s) a group called "ride shares between Cologne and Koblenz" where people post when they'll be driving, or "fleamarket Cologne" where people post their stuff (not sure how this isn't just a bad/limited replacement for ebay, but that's what I see Facebook being used for).

As for replacements for the other parts of Facebook/Instagram, I don't know because I didn't switch away from using Facebook or Instagram: I've never used it. If you mention what you use it for, I can tell you how I achieve those goals instead. If it's keeping up with people, it's by meeting and chatting. Or if they don't have chat, then email and meeting. Or if you mean how to share pictures, I guess that would again be email or chat.

It's much better than ebay because no one has to pay the 10% fee. The transaction is direct between the buyer and the seller.

was there a big case that FB was a monopoly in 2013? Even in 2019 it's very murky

Personally I would say Google is a much bigger problem. Where I manage to stay away from Facebook (yes, WhatsApp and Instagram and whatever else they may have as well), Google is something I absolutely cannot get around: AOSP, YouTube's monopoly on online videos, Search is very good for many types of queries, google-hosted email (I can hardly choose not to email companies that use it), and of course Google's terms of service on every website that uses Analytics or Ads or embedded YT or an embedded Google map (most of the time: all of the above). I will even admit to using Google Maps because owners can't be bothered to put their businesses on the collaborative OpenStreetMap. By comparison, Facebook has a Like® button (not hard to block), bundles some stuff with other features in the Android SDK (not sure how big a deal that is), and other people sharing their contact list (so Facebook knows with whom I talk, just not how frequently or what about).

Of course, I'm fine with doing something about Facebook (I don't mean to turn this into a whataboutism), but to me this is not the biggest abuser of power at the moment. Google knows practically every aspect of practically everyone's life over here, which is way scarier than Facebook knowing with whom I talk.

Emails like these should be enough for demanding the breakup of Facebook.

Isn't that sort of thing pretty normal? ABC won't let Netflix run ads. Companies usually don't run advertising for their direct competitors.

> ABC won't let Netflix run ads

I suspect Netflix can run its ads on other TV channels (and if they can't/aren't allowed that's a problem in itself).

As far as I can tell Facebook is the only place in town when it comes to social networks in the Western world, and it's a pretty big town, so to speak. As such, FB not letting a company like Google to advertise its services on this "only place in town" proves that either the town needs expanding (quite a difficult thing to do, as pretty much the whole current "town" population is pretty saturated with these FB-only products) or the "place" needs breaking up, i.e. Facebook needs to be split into different social networks.

CBS All Access is running ads for Apple TV+

As is Hulu, owned by Disney. I actually saw the other day a Disney+ ad directly follow an Apple TV+ ad.

That’s because Apple TV+ is a joke right now and literally a threat to no one.

Why not take the money and seem like a good sport while you’re at it?

A free market should regulate itself.

A company like Facebook can regulate the market.

That's when it becomes a problem.

> A free market should regulate itself.

... but it won't. Never has, never will. 'Regulation' serves a larger context, and the market does not value externalities.

> A free market should regulate itself. ... but it won't. Never has, never will.

The concept that capitalism works best if it's free from any/all regulation could work with a very strong shared societal moral fabric.

Sadly, Western culture accepts and even promotes greed and selfishness over the common good.

I don't think Facebook has a monopoly on eye-ball shares in particular. They might have monopoly on social networking as such but given they're not the only thing a person will see in a day by a long-shot, I can't see how they're being more anti-competitive than a TV network (which also has a large but limited share of views).

> They might have monopoly on social networking as such but given they're not the only thing a person will see in a day by a long-shot, I can't see how they're being more anti-competitive than a TV network

Almost no-one bellow the age of 40 cares about TV anymore (apart from sports events), you're pretty off on this one.

Uh, even if you're right, the US is full of the 40+ people and their eye balls are high monetizable.

Even more, TV networks are just an example and it is fricken obvious that Facebook doesn't have an advertising monopoly in the US or world-wide.

> A free market should regulate itself.

Hoo boy. I agree it totally should. Been waiting for a while on that one though...

That´s an incorrect theory from 18th century economics.

It´s equivalent to saying, the Internet should regulate itself, and there is no need for any kind of security to protect against exploits.

Facebook can not regulate the market when it only controls 19% of it.

The behavior is the same, but the situations are different. ABC is a second-tier television network struggling for survival while Facebook is the dominant social network company and is abusing its position to stifle competition.

ABC is a second-tier television network owned by The Walt Disney Company, one of the largest media and entertainment companies in the world, operating a vast international industry of television networks, film studios, and theme parks.

And is about to launch a direct competitor to Netflix.

ABC, the network that is literally available for free via an HDMI antennae, does not care about Netflix. Disney, arguably the single biggest company in entertainment or media and ABC's parent, is about to launch a direct competitor to Netflix. Which party is more likely to be driving the decision not to air Netflix ads.

It was the case when there were only three major national networks as well.

That said, google is in a different business. Their ranking should be fair (aside for their paid rankings). In this case they should not be favoring themselves over others, that’s to say they should not artificially bury competitors in the fair ranking.

I don't think that changes anything. There's plenty of other illegal, monopolistic behavior to pick at here without demanding that ad companies run ads for their direct competitors.

To do what precisely? Separate the advertisment unit from the socialnetwork aspects of the bussiness? How would that work, the advertisement portion is what generates revenue for the social media product.

Usually companies get split up so they cant use their dominance in one area to forcibly move into another area. But advertisements in facebook social network isnt a separate product-its what the social network is selling

> To do what precisely? Separate the advertisment unit from the socialnetwork aspects of the bussiness?

We can start by separating FB into at least two (preferably three) different social networks. I'd be pleased to see IG becoming an independent, separate company, and at some point after that maybe the same thing could happen for Whatsapp. If there is the political will this thing is doable, but this is a pretty big "if", I agree.

Separate the advertisment unit from the socialnetwork aspects of the bussiness? How would that work

The same way it works for millions of other companies that aren't Facebook?

The Facebook breakup is vindictive. What monopoly do they hold?

The monopoly on social networks in the Western world, don't you think that's a pretty (I'd say huge) market?

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