For example, imagine three restaurants competing. Two of them make an agreement with a common supplier to shut out the third competitor. That is what I think of as anti-competitive.
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.
15 USC §18 says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly."
Nevermind that, let's say it is about protecting consumers. How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. IIRC Facebook reduced the price of WhatsApp by removing the dollar fee.
The 2nd one is quite obvious. Afterwards, there is less competition and the aquire has increased their market share, buying power, control of a supply chain, platform, infrastructure or some other market dominance position.
The 1st one... Do you prefer a theoretical reason? Empirical examples? rhetorical, political, philosophical? There are lots of reasons why monopolies are harmful.
The legislation itself, and the reasoning behind it was liberal-economics... ie "capitalism." Capitalism, from a pro-captialist perspective, works because of a superior price system. Monopolies break price systems, whether they are public or private monopolies.
There are a lot of other reasons too.
Since this is about digital monopolies and "platform" is a primary form of market dominance.... Compare to WWW-vs-AOL. One was a closed, private, system where a single companies dominates a primary bottleneck. One was open. Do you think the WWW would have achieved what the WWW achieved if they had won that platform war?
Consumers have been fairly directly harmed, actually. Facebook operates a walled garden, without interoperability. You can post from Facebook to Instagram, or Instagram to Facebook, but not Instagram to Snapchat.
It would be nice if social networks were more open, in the spirit of the web. But they're not, and by they're nature, network effects are everything. No one wants to be on a social network that none of their friends use.
Meanwhile, Facebook has been among the most aggressive data collectors, collecting all manner of data on users, and then selling and monetizing that data.
Beyond that, Facebook also controls an extremely large amount of speech in the world, including political speech. All of this is directly harmful to consumers.
If there were several large social networks, both of these might be mitigated, or resolved.
Both platforms charge other businesses to advertise, because of the limited options businesses have to advertise they can charge high prices.
Those advertising costs get passed on to consumers in the form of higher prices on products.
We need to look beyond the "Price = 0" narrative when we're investigating things that in this new era are free.
Facebook used to only have text, and people linked to pictures on (mostly) Flickr. And then MZ realized 80% of Facebook posts Link to pictures on outside websites. That’s competition for ad placement; so FB added picture storage, albums, etc. same with Videos.
The customers, advertisers, previously had Flickr as an option. Now they don’t. That’s not a coincidence. And that’s not even illegal on FB’s part as long as they aren’t a monopoly - but now they are.
Unless you have inside knowledge about Instagram’s business plans, it is reasonable to assume they would have had ads sooner or later, as no other monetization scheme seems sustainable for this kind of “product”.
The nipping of competition in the bud does not make it any less anti competitive.
"Consumers" on Facebook are ad buyers, not users. Prices aren't 0 - Facebook's revenue was $70bn in 2019. That comes from businesses buy ads. Everything Facebook does to dominate the social media space is about selling more ads for more money. That's why they buy competitors, shut down rivals, and aggressively do what they can to drive prices for the ads on their platforms up.
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.
So FB pushed an offering that consumers didn’t want and it wasn’t successful - all of this without government intervention.
You can surely weasel out some explanation for this product strategy that does not include "suffocating Snapchat", but neither Facebook nor any other company that I'm aware of has done anything similar[0]. And the only reasonable reason Facebook will do that, and can afford to, is its monopoly -- the use of which to further itself is likely an antitrust violation.
[0] Apple regularly does multiple competing products - but they are all internal. Only the "winner" is put on the market.
See Google chat/messages apps.
For that matter Microsoft runs Teams, Skype, and GroupMe.
But Facebook did 3 within 6 months after Snapchat refused a buyout offer. That's very different from Google (trying multiple over years to see what/if sticks) and Microsoft (trying multiple over years for different market segments and/or NSA requested purchase).
Yes, all 3 are monopolists, MS almost got broken down for abusing theirs. What are you trying to say?
And in the example above. Both Google and Microsoft are “monopolies” but they each have viable competitors....
Someone apparently told the FTC and the European authority.
Are you claiming that this state of affairs is good for citizens at large? I disagree. I believe the function of a government is to make life better for its citizens at large, and that the enforcement wrt Microsoft failed that goal (and will likely fail that goal with Google).
Yes MS still has 90% market share with the desktop - but it doesn’t matter. People’s attention and all of the energy and money moved to the web and mobile making alternate platforms viable. Apple alone sells more iOS devices than all personal computers combined. It’s only 15% of the market.
It wasn’t the government that allowed Apple and Google define the current era of computing.
When it comes to office, Google’s offerings and Apple’s offerings are good enough and they are free. Office 365 is an excellent deal compared to paying $600 for Office like you did in 2000.
Most people can get by with an iPad or a Chromebook and Macs are a viable alternative.
As far as Google, outside of Sheets and Maps, I find most of Google’s products second rate. I use alternatives I used Google search for the first time in ages without an ad blocker and I found it to be an abomination.
As another anecdote, the government sued IBM for being a monopoly in 1969. By the time the case wound its way through the courts, the government dropped the case because it didn’t matter. The market had moved on. (https://www.nytimes.com/1982/01/09/business/why-baxter-dropp...)
By 1982, the PC was already taking over. Just like while the government was worried about the Microsoft “monopoly”, Jobs was busy raising Apple from the dead, Google was moving from a college campus to being a real company, Amazon was expanding from just selling books and companies were starting to decrease their dependence on Win32 APIs and on to the web. Not to mention that Java and Flash was making rich cross platform web apps viable.
They wouldn’t do it if it didn’t benefit them, and as a rent extracting monopolist, it’s always at the expense of the rest of society.
You might not see it if you don’t look while it’s happening. Ask someone who lived through the IE times.
I hope more companies release free products. As many as possible.
Basically all internet products are free, in the modern era. This is not some crazy, extreme thing. Because it is what literally almost every internet products does.
If I understand your position correctly, you are fine with it. I'm not. We can agree to disagree.
[0] Facebook had an experiment where they showed only sad news to some people, only happy news to others, and tracked the resulting mood which was affected.
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.