Facebook’s dominance is built on anti-competitive behavior

I don't say anything on Facebook that I wouldn't want on the front page of the New York Times. I don't trust either them or other users to keep it private. (I don't even like putting sensitive things in email, if I can do it in person instead.)

But yeah, it’d be nice if my taxes were spent on the problems we’re discussing here, rather than giving people access to cheaper Tim Tams.

I am aware that citizens of more repressive governments might not make the same choice.

* To operate in multiple countries so people can stay connected you have to abide by local laws even if they don't match the typical values.

* Social media is inherently winner-takes all due to the requirement of critical mass and connectedness. The winners have shifted over time (myspace) before but it seems harder to do than with other consumer services.

* Moderation of billions is a hard unsolved problem and is a game you can't win. You walk the tight rope of either allowing hate speech or being too overreaching in censoring. I'm not sure other startups will solve this any better.

* I'm personally not a huge fan of governments messing with competition, especially not for services where the people themselves choose to use it or not. Some share of people like using facebook and I don't feel banning them for the sake of their success is the right solution. While I'm from europe myself I feel over-regulating is one (among many) of the reasons why there are almost no dominant tech players here.

* Monetisation and use of user data. While there are other monetisation paths many people are actually ok with the trade of their data for features and should have this choice. The larger tech companies probably have some of the most well organised and privacy aware advertising platforms compared to smaller players where the likelihood of privacy incidents is arguably higher.

edited to reword as to not assume intentions of op

While Instagram and WhatsApp are still used the most, by far, there are some other social media apps that are also heavily used. Most notably Snapchat and TikTok.

Rick has to use FB because his grandkids' photos are there. Morty uses whatsapp because his soccer club posts practice times there. Network effects are essentially like infrastructure.

The problem isn't shitty FB. FB can be as shitty as it wants to be. The problem is their power, especially as a media company.

The entire conventional legal approach was (and still is) flawed. First, monopolies tend to form in The way it works is by "proving" anticompetitive and/or monopolistic behaviour, and fining companies.

Take the recent EU ruling (and pending copycat cases in the US) on the adwords "platform monopoly." The idea was that (1) Google controls the search engine marketing platform and (2) they use this control to favour their own search engine. They proved it. Google got a "cost of doing fine."

First, the whole premise is. If a monopoly exists, we state prosecutors shouldn't need to prove monopolistic actions. Monopolistic practices are proof of a monopoly, but the logical premise behind antitrust law is that monopolies are harmful... and we assume that anti-competitive/monopolistic behaviour happens. Let 3rd parties sue privately for specific abuses, but the state should be focused on preventing monopoly not retroactively punishing use of that monopoly.

If prosecutors have to prove individual abuses separately, they will never make a dent. Most "monopolistic behaviours" are not proveable. They may not even be decisions, they're just what happens in a monopoly.

I totally agree with you about bogus "consumer welfare tests." This is academic hogwash, and it's probably there to provide cover for inaction.

Second, "what to do now" is unavoidably hard, subjective and uncomfortable for a court. Cases vary too much.

From a "greater good perspective," FB could just be shut down. As long as data is destroyed, no one but FB shareholders (and employees) lose. I don't mean that they should be shut down, just that there are no external welfare concerns.

Google is more complicated. Alphabet needs to be restructured into 5-6 companies. Google's (high quality and public benefiting) R&D would be in danger. You'd need to enforce non-collusion between infrastructure, content & ad platforms. It's not something a court can do well, using 19th century case law especially. Case law says nothing about whether or not a ruling was a success.

Mostly, antitrust law should deter monopolies from forming in the first place. Monopolies should voluntarily avoided by companies, because antitrust should be something that doesn't pay to mess with. As things stand, monopoly is the best strategy.

Last, a lot of what needs to happen needs to happen outside of strict antitrust bounds. The phone plans available to you are more closely related to political decisions (eg radio spectrum) than the actions of individual companies. Facebook's monopoly, the most worrying aspects of it, rest on data collection and advertising practices that most people find horrible, and believe should be illegal.

Antitrust may not have even been necessary if (a) those mergers hadn't happened (b) personal data hoarding wasn't a free-for-all and (c) advertising was not so unregulated.

I agree about sleeping on the wheel though.

I mean this: If toyota were to disappear tomorrow, $250bn worth of car-production capacity would disappear. Fewer cars could be made, at least until new investment in factories and such.

If FB disappeared, people would still have plenty of social media to access... or other forms of media, communication and entertainment.

Yes, I have thought that, before I knew any better. Now I know that Facebook became successful by making people think that other people wanted them to use Facebook.

E.g. http://www.krist0ph3r.com/2009/06/reminder-kristopher-invite...

The point is that data collection is just problem #8345732473 on the great scroll of reasons why monopolies are bad. It doesn't cause the monopoly and it isn't a significant problem if you make the monopoly go away.

In the United States, when the Justice Department blocks a merger, it is not simply deciding to disallow the merger. It does not have the power to do so. Instead, the actual mechanism is via antitrust lawsuit.

If the merger is likely to reduce competition to such an extent that it would harm consumers, and if the Justice Department is so inclined, the Department files an antitrust lawsuit to block it.

This is a “I’ll push you out of the market by taking a loss” behavior, similar to MS inclusion of IE in Windows.

Whether or not NS or SC was/is a good product is irrelevant. This is the behavior that antitrust legislation is supposed to stop. The law iirc does not require that prices increase directly; rather that customers be harmed (of which price increase is a possible expression)

The customers in this case are advertisers, and they are definitely harmed - there are now two online advertising venues, Google and Facebook, both making outsized profits because they are the only two games in town. (Which on its own is NOT illegal - but using dominant position to maintain it, as Facebook has done with e.g. Onavo, instagram, Snapchat) is anticompetetive.

Buying a competitor so they can't compete with you is preventing competition. You might have a definition that says it's not, but that just means your definition is wrong. The FTC and United States Department of Justice Antitrust Division examine every significant merger to test whether or not it's anti-competitive. Every government has a department looking at mergers and acquisitions for this reason (https://www.ftc.gov/policy/international/competition-consume...).

I don't quite agree with it philosophically (vertical intergration done right boosts efficency for everyone and done wrong only hurts themselves making it ironically procompetitive for those who don't make the same mistakes) but I can see the logic behind it.

Have you read antitrust law? The Sherman Act is vague enough that anything that could be considered anticompetitive would violate the law. The "Rule of Reason."

> It’s absurd to construe not actively helping competitors by giving them your data as “anti-competitive.”

Publicly agreeing to an agreement allowing something and then changing the terms to control how competitive they can be is.

This is of course what happened. I joined Facebook when it was first opened for my school (long ago). I immediately loved the UI over the XSS dumpster fire that was MySpace, but I knew like two or three people there. I kind of forgot about it, but checked back a couple months later, and suddenly I knew a bunch of people on Facebook. My days of using MySpace at that point were basically over. The data indicates this was not merely an anecdote, but basically how MySpace died.

EDIT: Also, the way antitrust law is written, anything that has this kind of network effect will likely be a candidate for a monopoly. It's almost inevitable. The courts and legal establishment have over time added the criterion that antitrust should only be enforced when monopoly power harms consumer welfare (usually understood to mean higher prices), which is a much trickier proposition in the case of Facebook.

FB's customers are the advertisers. And they pay very good money, or FB wouldn't have had the money pay for WhatsApp, Instagram and its tens of thousands of employees.

But the problem is not M&A on its own; the problem is that through M&A, big players are able to stifle competition. I'm sure it's possible to define a reasonable law (about company size, market size and kind) that would make it much harder for today's Google, Facebook, Microsoft and Amazon from acquiring potential would-be competitors, without making it harder for two $100M companies to merge, or one $100M company to buy a $20M one.

https://news.ycombinator.com/newsguidelines.html