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FTC Sues Facebook for Illegal Monopolization

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Re: FTC Sues Facebook for Illegal Monopolization

#441

Post by julienb_sea »

SoSoRoCoCo wrote: post #396
crazygringo wrote: post #199

Honestly, while I have my doubts about this succeeding, it nevertheless feels like the big tech suit most likely to succeed. Amazon promoting its own brands isn't much different from a supermarket offering its own brand items. Apple isn't a monopoly in phones because of Android. And Google's search is so inherently tied to selling ads as a business model that separating them is a difficult argument -- plus search com…

If it doesn't succeed, expect more of the same from FAANG. Until we have FANG, then FAN, then FA, then just F.

A high profile acquisition or merger within FAANG is extremely unlikely. These companies are already treading a careful line with antitrust and a merger would be unbelievably risky. There is also basically no point on either side; these companies are doing just fine. If anything the competition is probably good for them.

Netflix is probably the highest risk of being acquired by someone like Apple, or more likely traditional media owner like Disney or Comcast.

Re: FTC Sues Facebook for Illegal Monopolization

#442

Post by WillPostForFood »

systemvoltage wrote: post #329
KaiserPro wrote: post #208

Earlier quoted context omitted.

FB are pouring billions into oculus. They intend to operate it at a loss for a good 5 more years. Only when AR is a thing will they stat to push for profitability.

I think this is the problem. Operating at a loss while wiping out players without deep pockets to run at a loss. This should be illegal. Amazon and Uber have wiped out small players.

If they are dumping billions into manufacturing, and selling at a loss, maybe that's a problem. If they are dumping billions in to R&D and improving the tech, then let them do it.

Re: FTC Sues Facebook for Illegal Monopolization

#443

Post by julienb_sea »

gamblor956 wrote: post #301
a_crc wrote: post #250

Earlier quoted context omitted.

Is it really that big of a difference? You still have to go to the one section of walmart where they stock the cheese or car batteries or whatever. Walmart can set up their own shelves to emphasize their own brands if they want. If you pay with a credit card at walmart they can collect the same data about your purchase history as amazon would as well.

Walmart paid for the products on their shelves. Amazon does not pay for most of the products you can buy on Amazon. The difference, in case it's not clear: Walmart is the manufacturers' primary customer, so it's irrelevant from their point of view what products Walmart chooses to sell in its stores. The third-party sellers are the manufacturer's customers. The manufacturers still get paid either way. But we're not co…

I don't think this distinction actually justifies treating Amazon in a dramatically different way than Walmart. I agree that Amazon and Walmart have different strategies for managing inventory, in house branding and product placement. Walmart also operates an in house clone of Amazon in the form of their online store.

Why exactly is Amazon so much worse?

Re: FTC Sues Facebook for Illegal Monopolization

#444

Post by notimetorelax »

chillacy wrote: post #304
rhizome wrote: post #106

Earlier quoted context omitted.

You might read up on the Trusts era that brought about the Sherman Act[1]. Trains? Horse carriages and wagons were still available, not to mention boats. However, these are not equal modes of travel, though they are "similar" in that they are transportation , and so it's not about internet-based communities per se. It's the fact that Facebook is "Facebook" that is the problem. That you can't imagine Facebook's equal…

By this definition it seems like every social media app, by virtue of it being different, is a monopoly of its own? Eg: Twitter is “Twitter” that is the problem.

If they interfere with the competition, that is.

Re: FTC Sues Facebook for Illegal Monopolization

#445

Post by theptip »

baby wrote: post #193
Wowfunhappy wrote: post #174

Earlier quoted context omitted.

In an ideal world, I'd like both. Mandated interoperability would help a great deal—but I also don't believe Facebook should ever have been allowed to buy Whatsapp, and it's worth undoing that.

Why? WhatsApp today is a great messaging app platform with end-to-end encryption.

The argument is that purchasing WhatsApp was anticompetitive and allowed Faceboook to cement their dominant market position. WhatsApp the app might be fine, but the competitive landscape is much weaker than it would have been if the FTC had blocked the acquisition.

I posted this elsewhere but I think Ben Thompson gives a very deep analysis of the issues in the competitive landscape here:

https://stratechery.com/2017/manifestos-and-monopolies/

The summary would be something like "any acquisition of a social network by another social network is necessarily anticompetitive and should be banned, or at least have the presumption of being illegal".

The only way that there can be a true competitor to Facebook is for a smaller social network like Instagram, or WhatsApp, or TikTok, to not get acquired and to grow until their userbase is bigger.

Zuckerberg understands this well; you can read his emails where he openly admits that buying Instagram is about preempting a competitor:

https://www.theverge.com/2020/7/29/21345723/facebook-instagr...

The money quote from Zuckerberg:

"There are network effects around social products and a finite number of different social mechanics to invent. Once someone wins at a specific mechanic, it’s difficult for others to supplant them without doing something different.”

“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc now will give us a year or more to integrate their dynamics before anyone can get close to their scale again. Within that time, if we incorporate the social mechanics they were using, those new products won’t get much traction since we’ll already have their mechanics deployed at scale.”

I think you can apply the same argument to WhatsApp; by purchasing a rival social network, they prevent it from being a competitive threat.

Re: FTC Sues Facebook for Illegal Monopolization

#446

Post by gamblor956 »

actuator wrote: post #338
gamblor956 wrote: post #299

Earlier quoted context omitted.

Amazon promoting its own brands isn't much different from a supermarket offering its own brand items. Amazon promoting its own brands is completely different from a supermarket offering its own brand items. You're confusing a bazaar with a retail store; the two are nothing alike legally or economically. The supermarket pays for everything on its store shelves (except, rarely, for certain new products on a consignment…

So many inaccuracies in this. > it uses its access to their sales data to come up with its own competing products. Every retail chain has data on what gets sold inside and where it was kept, how it was promoted etc. They can very well use this data and most probably are using it. > Thus, it is irrelevant to the manufacturer whether the supermarket promotes their store-brand product or the name brand product; Only til…

Every retail chain has data on what gets sold inside and where it was kept, how it was promoted etc. They can very well use this data and most probably are using it.

Yes, they are. They use this data to determine what products (specifically, what SKUs) to re-order from their suppliers.

Only till the time when their store brand starts selling much better and consumers develop a relationship with that.

I don't know why techies keep pushing this like it means something. The store brand product IS MADE BY THE NAME BRAND SUPPLIER.

I repeat, the store brand is just a different SKU offered under the name brand's white label product line. For example, Home Depot's RIGID tool like is made by the same company that makes Milwaukee and Ryobi. Those store brand cereals are made by General Mills. The store brand milk comes from the same regional dairies as the local regional name brand. Every single one of Costco's Kirkland signature products is made for them by a supplier that makes their own name brand products.

Isn't this very similar to the third party sellers having their own Shopify store and someone discovering it through Google Search/FB Shop instead of Amazon Search. The only argument that makes sense here is the usage of data.

No, because Shopify doesn't compete against its own sellers. The antitrust concern arises solely because Amazon is both the platform and a competitor and it uses its access as the platform provider to acquire data to compete.

Re: FTC Sues Facebook for Illegal Monopolization

#448

Post by WillPostForFood »

Erik816 wrote: post #42
minimaxir wrote: post #2

Key line: > The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp

If only there were some kind of federal agency, maybe a "trade commission" that could have blocked these mergers when they originally happened ....

Thanks Obama.

But seriously, by what rationale would you block the purchase in 2012? Instagram only had 25 million users at the time.

Re: FTC Sues Facebook for Illegal Monopolization

#449

Post by hnick »

gamblor956 wrote: post #299
crazygringo wrote: post #199

Honestly, while I have my doubts about this succeeding, it nevertheless feels like the big tech suit most likely to succeed. Amazon promoting its own brands isn't much different from a supermarket offering its own brand items. Apple isn't a monopoly in phones because of Android. And Google's search is so inherently tied to selling ads as a business model that separating them is a difficult argument -- plus search com…

Amazon promoting its own brands isn't much different from a supermarket offering its own brand items. Amazon promoting its own brands is completely different from a supermarket offering its own brand items. You're confusing a bazaar with a retail store; the two are nothing alike legally or economically. The supermarket pays for everything on its store shelves (except, rarely, for certain new products on a consignment…

> Thus, it is irrelevant to the manufacturer whether the supermarket promotes their store-brand product or the name brand product; they've already been paid by their primary customer.

Supermarket economics are more complex. Brands have to pay to go on promotion, and they have to pay to appear in the catalogue. I've heard placement fees for mailbox catalogue placements can be a significant bulk of revenue for some companies.

My wife recently started in a new company with retail products and was appalled at what goes on, but it's normal. The supermarket wants to promote your product? Pay up. Per product. They choose which, not you. If you don't, there's a good chance your shelf space gets replaced by a competitor next time it's under review. If you do, you'll often lose money while it's on sale. It's a very predatory arrangement enabled by the duopoly here in AU.

Re: FTC Sues Facebook for Illegal Monopolization

#450

Post by julienb_sea »

The monopoly argument feels questionable. FB's acquisition of Instagram and Whatsapp has certainly solidified their long term standing. There is so much behavior crossover between the three that at some level it's become just a branding exercise. Whatsapp is entirely replaceable by FB messenger, many instagram features are directly implemented in FB and vice versa.

These are all serving slightly different parts of the market, but the market has TONS of social networks that are entirely outside of FB control. TikTok, Reddit, Twitter, even an ecosystem like google accounts or apple accounts, these all are large competitors to different aspects of what FB offers.

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