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Facebook’s dominance is built on anti-competitive behavior

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Re: Facebook’s dominance is built on anti-competitive behavior

#111

Post by rmrfstar »

netcan wrote: post #85
oska wrote: post #21

I think the very unhealthy dominance of Facebook will only start to properly recede when countries outside the USA start to block its use. This is a highly predatory company that takes away sovereignty in each nation's cyberspace and it really only makes sense for foreign countries to block it and either let their own national corporate replacements emerge (as China has done) or foster the use of open social networks…

Small countries can ban facebook from doing certain things. Ultimately, some sovereignty exists even in global commerce. If New Zealand made (eg) political advertising, targeted advertising, or such ilegal, Facebook would stop doing it in New Zealand. That is treating the symptom, but it is not totally ineffective. Treating the problem is dealing with the monopoly. The current state of antitrust laws, norms and regul…

> It's entirely based around regulating 19th century monopolies,

This isn't as problematic as you suggest. We don't need an act of Congress to deal with FAAMG.

The way the laws are enforced and interpreted has changed in a very meaningful way. Read the A&P cases and ask yourself, "if Congress hasn't changed the law then what's up with Walmart?"[1]

The DOJ Antitrust division is asleep at the switch. There are a lot of reasons for this. One reason is the Microsoft case. The DOJ won at trial big time. At trial they won a break up. This was scaled back enormously on appeal, and it damaged the careers of the very talented lawyers involved. This created a high degree of risk aversion in careerist antitrust litigators. Something similar happened after Enron (fancy people were upset by how vigorously the DOJ pursued members of their class), which partially explains the lack of prosecutions after the 2008 financial crisis.

There was also a sea-change in ideology coming from the law and economics movement, and from the re-framing of antitrust through the "consumer welfare" lens.

In practice, "consumer welfare tests" only consider price. They do not consider quality. To "consumer welfare" tests, a $50 phone plan that sells my location without my consent is superior to a $55 phone plan that does not

[1] https://www.nytimes.com/1949/02/25/archives/a-p-loses-appeal...

Re: Facebook’s dominance is built on anti-competitive behavior

#112

Post by scarface74 »

input_sh wrote: post #84
deathgrips wrote: post #65

Earlier quoted context omitted.

It's a trade off. Do you want to risk being censored by your own country or risk being censored by San Francisco?

Can I democratically elect who will represent me in a Silicon Valley company? If not, I'm going to choose my own country. I am aware that citizens of more repressive governments might not make the same choice.

Because of both the electoral college and two Senator per state. If you live in a more populous state, your vote is worth a lot less than someone in Middle of Nowhere Nebraska.

Passing laws is fine as long as your side is in power to enforce them the way that you like.

Re: Facebook’s dominance is built on anti-competitive behavior

#113

Post by sjy »

scarface74 wrote: post #105

The question is how does this “monopoly” hurt consumers? It’s social media . I use FB, just like most of the rest of the world. But if it died tomorrow the world would go on. Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?

See page 31 of the paper [1] discussed in the article, under the heading "Harm to Consumers."

[1] https://www.omidyar.com/sites/default/files/Roadmap%20for%20...

Re: Facebook’s dominance is built on anti-competitive behavior

#114

Post by jeffreyrogers »

scarface74 wrote: post #105

The question is how does this “monopoly” hurt consumers? It’s social media . I use FB, just like most of the rest of the world. But if it died tomorrow the world would go on. Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?

I've been thinking about that lately, since you're right that the way anti-trust law is currently interpreted there has to be a consumer harm. I think the solution is something like this: consumers use not just Faceboook, but other products and services as well, some of which are not invented yet. By buying up early stage companies that potentially harm Facebook's core business, or by leveraging its large network effects or vast amount of data that no one else has access to, Facebook is harming long-run consumer welfare by preventing or handicapping future innovative businesses and services.

Re: Facebook’s dominance is built on anti-competitive behavior

#115

Post by scarface74 »

loceng wrote: post #101
ankit219 wrote: post #92

Antitrust laws were always based on supply side monopolies, while this is a demand side monopoly, and would be a tricky case for anti trust to prove. If the mandate is to do what is best for customers, then the best solution I can think of is to let FB function as one entity but toughen the norms on data collection. The other thing is Facebook should not inhibit any other social network trying to grow using FB's grap…

Laws need to be updated to account for the network effects of the data lock position, where you, your data, and network are prevented from easily being mobile. Your digital data should be considered to be equivalent to you having built a house, a big asset, but now you have a big choice to make: abandon it because the state is doing some sketchy things that you don't agree with or want to support by the taxes collect…

Have you ever thought that the reason Facebook is successful is because people choose to use it? No one is forced to use social media.

Re: Facebook’s dominance is built on anti-competitive behavior

#116

Post by rmrfstar »

scarface74 wrote: post #105

The question is how does this “monopoly” hurt consumers? It’s social media . I use FB, just like most of the rest of the world. But if it died tomorrow the world would go on. Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?

The idea that antitrust law exists to improve "consumer welfare" is a modern one. Until the late 1970's, antitrust was about exercising democratic control over corporate power.

Re: Facebook’s dominance is built on anti-competitive behavior

#117

Post by maltelandwehr »

oska wrote: post #21

I think the very unhealthy dominance of Facebook will only start to properly recede when countries outside the USA start to block its use. This is a highly predatory company that takes away sovereignty in each nation's cyberspace and it really only makes sense for foreign countries to block it and either let their own national corporate replacements emerge (as China has done) or foster the use of open social networks…

The majority of users/voters in most countries do not want their governments to ban Facebook. Many countries had local alternatives that went out of business because users switched to Facebook.

Re: Facebook’s dominance is built on anti-competitive behavior

#118

Post by noble_pleb »

snarf21 wrote: post #110
scarface74 wrote: post #105

The question is how does this “monopoly” hurt consumers? It’s social media . I use FB, just like most of the rest of the world. But if it died tomorrow the world would go on. Besides, anti trust in the US is focused on consumer harm. How does a Facebook’s monopoly hurt consumers?

I'm not trolling but the same way ALL monopolies hurt consumers and the fair market. It is not a hard thing to read on up monopolies across history. And it isn't just FB. We need to stop the M&A activity that is only good for the VCs and not the consumers. We need to start unrolling the ones that have already happened.

But the difference is that "ALL OTHER" monopolies are priced whereas facebook is a free product. Can it be called a monopoly if your product is free? Pretty sure, most lawyers won't have a hard time convincing a jury that it can't be.

Besides, if FB is a monopoly then so are Twitter, Google, Reddit, Quora, etc. Its an oligopoly of sorts with each player dominating a slightly differentiated product and all products are free of cost.

Re: Facebook’s dominance is built on anti-competitive behavior

#119

Post by scarface74 »

beagle3 wrote: post #52
alexmingoia wrote: post #44

Earlier quoted context omitted.

The acquisition didn’t reduce competition for advertisers because Instagram didn’t have ads before Facebook owned them.

Facebook didn’t have any adverts before it had them. Neither did google, or for that matter cable TV. 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.

Cable TV has always had advertising. I really wish this myth would die.

Re: Facebook’s dominance is built on anti-competitive behavior

#120

Post by scarface74 »

beagle3 wrote: post #51
alexmingoia wrote: post #14

Earlier quoted context omitted.

Instagram didn't have to sell. Less competition isn't the same thing as preventing competition. 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.

Snapchat refused to sell, and Facebook pushed 3 different Snapchat competitors at the same time as a result, none of which were a success on their own - but which did make a significant dent in Snapchats growth. 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 antitrus…

Snapchat refused to sell, and Facebook pushed 3 different Snapchat competitors at the same time as a result, none of which were a success on their own - but which did make a significant dent in Snapchats growth.

So FB pushed an offering that consumers didn’t want and it wasn’t successful - all of this without government intervention.

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