Comment by dgroshev | Hacker News Reader

Comment by dgroshev | Hacker News Reader

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Alright, let's reframe this:

- AcmeShop is paying Facebook money to run a targeted marketing campaign on Facebook

- to do this, in practice AcmeShop is forced to share visit data with Facebook (this bit could be done differently, but for some reason that's how Facebook does it)

- a customer goes to AcmeShop, doesn't make an immediate purchase, leaves

- AcmeShop is paying Facebook to run a remarketing campaign for that customer, showing them the same product leading to AcmeShop

- at the same time, Facebook is using information that they obtained in the process of providing paid services to AcmeShop to show goods on their marketplace platform to the customer. For Facebook, it's not "remarketing", it's just "marketing" at this point. Not only that, but they control which ads they are showing, and naturally with Marketplace-only placements Facebook has an advantage over AcmeShop (again, using information that they effectively forced AcmeShop to provide)

Does this reframing make the problem of Facebook being both an ad seller, an ad manager, and offering the same service as their customers any clearer?

Thanks for explaining. I think I've identified the part in your argument I don't understand:

> but they [Facebook] control which ads they are showing, and naturally with Marketplace-only placements Facebook has an advantage over AcmeShop

My question is, why do you think Facebook won't simply sell the ad space to the highest bidder, whether it is AcmeShop or a Marketplace seller? Why do you think Facebook is giving an advantage to Marketplace ads? Do you have any evidence they are?

Remember, Facebook doesn't even make money if you sell something locally and pay in cash. A big way that Marketplace makes money is through ads. But if AcmeShop is bidding more for ad space, then presumably Facebook will show the AcmeShop retargeting ad instead.

If there is evidence that Facebook is showing lower-bidding Marketplace ads over higher-bidding AcmeShop ads in your Instagram feed, because of the fee it takes on shipped items that use Facebook Marketplace Payments, then yes I agree that would definitely be an abuse of power! And thank you for explaining that -- if that is what you're saying.

But I think it has to be shown that Facebook is actually engaging in that kind of anti-competitive behavior. We can't just assume it. There's nothing inherently wrong with running the two businesses together.

(Also, if by "Marketplace-only placements" you're referring to boosting listings within Marketplace as opposed to more general ads like on Facebook, there's nothing preventing AcmeShop from listing and boosting its items on Marketplace as well.)

> why do you think Facebook won't simply sell the ad space to the highest bidder, whether it is AcmeShop or a Marketplace seller?

Depends on which placement you mean.

"Boosted listings" in Facebook Marketplace? AcmeShop can't bid on that.

In-Marketplace ads like [0]? They are similarly in-Marketplace, I don't think it's technically possible to bid on them.

In-feed Marketplace ads like [1]? They are specifically Marketplace, I have no evidence that they enter the same bidding pool, and it seems improbable.

In-feed generic auto-placed ads like [2]? Maybe, maybe not.

> Remember, Facebook doesn't even make money if you sell something locally and pay in cash.

Facebook doesn't just make money from boosted listings, they also benefit from people just using Facebook. Even if Facebook didn't make any money directly from Marketplace, it'd still be worth it for them and it'd still be anti-competitive. If they can make themselves the main marketplace, it creates a large captive audience scrolling through their ads.

> But I think it has to be shown that Facebook is actually engaging in that kind of anti-competitive behavior. We can't just assume it.

Aren't we commenting under an article about a fine for anti-competitive behaviour?

[0]: https://storage.googleapis.com/website-production/uploads/20...

[1]: https://newsfeed.org/wp-content/uploads/Marketplace_boosted_...

[2]: https://storage.googleapis.com/website-production/uploads/20...

Thanks for all the extra information.

I think we've reached the point where it really does hinge on exact details which we don't really know the answers to. And while yes, we are commenting on an article about supposed anti-competitive behavior, the article doesn't actually describe the specifics at all, and courts get things wrong all the time (and overturned on appeal).

I mean, AcmeShop is free to list their items on Marketplace as well and compete with boosted ads in cases [0] and [1], and like you say, "maybe, maybe not" their ads compete on bids for [2] -- I would assume they would if Facebook is maximizing profit.

I don't see any evidence that Facebook is obviously or necessarily abusing its position, but it's not like I could rule it out either, specifically in the case of [2] -- it seems like it depends on the exact ad selection algorithm they use.

In any case, I can't keep the conversation going any further, but it's been very informative having this exchange. It's been a great back-and-forth, so thank you!

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