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tuesday, federal Judge James E. Boasberg ruled that, FTC tries to break up Facebook can move forward.This the case itself Far from being decided. But by supporting the FTC’s theory that monopolies hurt consumers even if their products are free, the judge has shown that Facebook and other tech platforms are not invincible.
It’s a big change from last summer. In June, Judge Bosberg of the U.S. District Court for the District of Columbia granted Facebook’s motion to dismiss the case. (The company later rebranded itself as Meta Platforms, but Facebook remains a defendant.) The problem, he argues, is that the FTC, which is seeking to reverse Facebook’s acquisitions of Instagram and WhatsApp, has provided no evidence that the company is a monopoly.But in the same ruling, Bosberg gave a clear blueprint on how to revive the case. All the government has to do is provide evidence that Facebook dominates the social networking market.
Two months later, the agency filed a new complaint with data points from Comscore, an analytics firm Facebook itself uses, showing the company dominates the market under various metrics: daily active users, monthly active users and Time spent by users. Bosberg appears to be impressed by the new evidence. “In short,” he said in latest ruling, “The FTC has done its homework this time.”
Market share data alone does not fully solve the problem. Boasberg noted that the FTC must also prove that Facebook’s alleged monopoly is bad for consumers. This is where the ruling gets interesting. From the outset, the campaign to enforce antitrust laws against companies like Facebook and Google faced a major hurdle: How do you prove that consumers are being harmed by companies whose core products are free? (Or, in Amazon’s case, known for being cheap?) Technically, antitrust law has nothing to do with price, but since the late 1970s, judges have tended to interpret it as price. The standard way to object to a corporate merger is to show that it will result in a higher price. (for example, see beef industry.)
In recent years, legal thinkers, including FTC Chairman Lina Khan, have been developing another way of thinking about the dangers of tech monopolies: When there is no competition, companies will be free to do things their users don’t like, and will feel less likely to improve their products pressure.For example, academic Dina Srinivasan argues that Facebook has degraded its users Privacy Standards Once it beat early competitors like MySpace. The FTC includes this theory, along with a few others, in its brief. It argues that Facebook’s dominance also allows the company to include more ads in users’ feeds. And, the FTC noted, Facebook shut down its own in-house photo-sharing app after acquiring Instagram, suggesting consumers would have more choice if the two companies remained competitors.
Whether these non-price theories will succeed in court has so far been an open question. That’s why Boasberg seems to accept them as a big deal. “In short,” he wrote, “the FTC claims that while Facebook’s acquisitions of Instagram and WhatsApp did not lead to higher prices, they did lead to lower quality of service and less consumer choice.”
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