Buenos Aires Hours | Is Facebook a monopoly? Some ideas to help the FTC …


There has been a flurry of reports lately regarding a recent ruling by U.S. District Judge Jeb Boasberg dismissing the Federal Trade Commission’s antitrust complaint against Facebook. Indeed, the initial coverage by the main news organizations such as The New York Times and The Washington Post described it as a victory for the social media giant owned, controlled and led by Mark Zuckerberg. The market agreed, bringing Facebook’s dollar value to over $ 1 trillion. Yet this conclusion is difficult to derive from the facts, as Judge Jeb made clear in his opinion, indicating that the FTC can amend her case – if it corrects some of its key arguments.

For anyone operating in the same digital ecosystem as Facebook, and especially the media (which both compete with and depend on the social media juggernaut for a substantial portion of their revenue), it’s perfectly clear that Zuckerberg’s creation has a excessive market power and uses this for its own benefit. The same can be said of Google and a few other Silicon Valley giants. While antitrust law is very specific and technical in the way it defines the concepts on which it operates, a common sense analysis shows that Facebook is indeed a monopoly, if not an oligopoly, and that without some restraint it will cause a problem. irreparable damage to the digital ecosystem, and in particular damage to the flow of information in the modern era. That’s not to say that Facebook, Google and the rest are monstrous companies acting in bad faith. The value they have created is immeasurable, and they deserve to be rewarded for it (as they have been, just look at their market capitalization).

A monopoly, according to Justice Boasberg, is defined by US federal law as an actor with “the power to increase prices profitably or exclude competition in a properly defined market.” According to the judge, the FTC did not lay the groundwork to accuse Facebook of being a monopoly, giving a vague but seemingly sufficient description of the extent of the market, but failing to show that it actually wields market power, normally defined by circumstantial evidence of a market share that exceeds about 60 percent.

Facebook and its main products, namely Instagram and WhatsApp, are almost global staple, the digital equivalent of “the town square” in Zuckerberg’s own words. For a user in an increasingly digitalized global world, Facebook products represent the entry point into the world of digital intercommunication. While Google and its multitude of products are the primary entry point to the vast expanse of information hosted on the web, Zuckerberg companies control the gateway to people-to-people interactions, as together they have truly become the gatekeepers of the information flow in our time. . Metrics to back up these claims abound, with Google taking the lion’s share of the market for mobile operating systems with Android, internet browsers with Chrome, and of course searches through Google. Facebook, in turn, absolutely dominates social media interaction through Facebook and Instagram, and messaging through WhatsApp and Facebook Messenger. Other big players in the space – from Microsoft to Apple, LinkedIn and ByteDance (TikTok) to LinkedIn – remain marginal, especially when viewed from a Western perspective.

Thus, users – or consumers – are essentially bound by the rules and decisions made by these massive multinationals with little or no alternatives. Either go through the heavy task of browsing the global web and its derivatives by relying on fragmented and therefore more cumbersome substitutes, or give up a major digital presence. If internet access has become an essential human right, then there really is no way around Google and Facebook.

What is so wrong with that, one wonders, if all of these services are free? From email to research, messaging and video calls to posting and comments, the creations of Mark Zuckergberg, Sergey Brin and Larry Page give us instant access to a wealth of information and instant communications like the world has never seen one without having to take out our wallet. This mainstream audience, however, has given these companies and a few others a level of power that equates to an authoritarian’s wet dream. The control that a small, homogeneous group of engineers working in Silicon Valley has over our minds and our privacy exceeds that of any government in the history of mankind. This puts them in a position to determine, voluntarily or not, how we interact and build our subjectivity, ultimately impacting our decision-making processes. The exponential growth of disinformation – loosely defined as “fake news” – is directly linked to their oligopolistic power.

The genesis of this power is twofold. The products these companies have provided to us, at no upfront cost, have been so revolutionary that they have led to their worldwide adoption, no questions asked. Its maintenance has been fueled by an unprecedented digital advertising-centric business strategy that ultimately relies on attention manipulation. But this economic model has been built at the expense of competitors in the attention economy, who have been abused to the brink of extinction.

The digital advertising ecosystem has been the driving force behind the evolution of the digital space over the past decades, which means that the flow of information in our societies has been determined by the giants’ quest for greater revenue. of Silicon Valley. Because these companies control both the flow of information and the revenue generated from that information, they have become the true gatekeepers of the modern world. Google and Facebook have both created stacks of integrated digital ads that control every link in the chain, starting with “inventory” or how much time we each spend using their platforms. This inventory is packaged and programmatically sold through the world’s largest exchanges – similar to stock markets but attracting human attention – fueled by huge treasures of personal data that we never knew they had. Ultimately, each actor in the information ecosystem – from The New York Times to Líonel Messi – ends up paying kings tax, either as a user (in personal information and attention) or as a content producer (in inventory and fees).

The damage to the consumer is based on a degradation of the information ecosystem that the Zuckerbergs of the world have helped to build. And the control of this attention monopoly has only deepened, worsening the economic imbalance that is becoming increasingly difficult to reverse. Real competition would make the digital ecosystem more transparent, ultimately promoting quality over clickbait. The crux of this problem lies in the digital advertising market, which Facebook and Google, of course, also control.

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