> The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp
From a privacy point of view it doesn't matter who collects it so long as the FBI and US military can retrieve it on-demand without a warrant or probable cause under FAA 702.
> From an entrepreneurial point of view I wonder how it will affect the future of big tech players acquiring other companies.
It won't.
The full power of the United States does not reverse all those shares you sold to a big tech company, or sold as a big shareholder of a big tech company.
If the market tolerates a price, based on their own exuberance and view of future revenues, that is fine here, and the incentives will continue to promote near term profits with a who-gives-a-shit slim possibility of cleanup by the regulators.
Corporations are just a conduit for money, and the regulators only enforce actions on the conduit, and thats a maybe.
Splitting those two properties off would be fantastic.
I know it's a pipe dream, but an independent Oculus would make me so happy. I suspect this is impossible due to the early nature of the VR market. Maybe just an FTC requirement _not_ to require a FB login?
There's also a bunch of social features embedded in the Steam client; I wouldn't be surprised if regulators took exception to any acquisition by another company with a social network.
Seems a bit short-sighted because if Oculus becomes the dominant VR platform that Facebook envisions it to be then it's going to dwarf instagram in terms of economic importance (for advertisers and users) over the long term.
The flip side of it is that VR isn't mature enough for a company like Oculus to succeed independently. Having the resources of Facebook behind it will help the VR market as a whole (for now).
That's a big if, one that hinges on way too many things to be able to successfully argue in court about:
1) VR ever becoming a huge player. It might. It might not. Right now there's no real evidence that VR will actually become a big deal, and Facebook could argue that this is a niche offering that can't be anti-competitive because there's no real market yet.
2) The feasibility of VR technology independent of major vendors. There's a strong possibility that without a huge R&D budget VR will never overcome the hurdles that might keep it out of the mainstream. Facebook could argue that removing Oculus would doom VR to failure in the market.
3) The Sirus/XM merger removed 100% of satellite radio competition (there's only one vendor left after the merger), but both Sirius and XM successfully argued that the market isn't big enough to support multiple vendors. Facebook could argue a similar case, that for the health of the VR market there should be fewer competitors.
I'm not a lawyer so I don't know if any of those would be winning arguments, but based on previous anti-trust cases I've followed that would be the strategy I would expect. And it might be why the FTC didn't go down that path.
-What if they're really comfy when they get slim, and people use them all the time, even for essentially web browsing.
-Later models can easily have internal and mouth facing cameras so you can smile at people in VR
-Let's intimately observe the finest twitch of every expression felt by our users, peering deep into their minds, learning more about how to manipulate and destroy humans than anyone ever thought possible.
Damn straight. The prospect of how much you can learn about human reactions is INCREDIBLE. Eye and mouth tracking is everything, here: it would be turning a wide variety of human behavior study into Big Data and straightforward machine learning.
What would you do with it? What wouldn't you do with it?
Just wait until you slip into the Oculus 5 and enjoy a movie night with your friends anywhere in the world!
Oh what’s that? Your eyes looked at the logo on the shirt the hero is wearing, are you perhaps interested in learning more about where you could buy it?
Or, if the Oculus becomes the most popular VR equipment, think about the advertising can be shown to people in VR Chat rooms, VR films, virtual cinemas..... all bound to a single company.
> I know it's a pipe dream, but an independent Oculus would make me so happy
While that would cool for short-term, independent Oculus can stagnate. VR still needs many more billions to be truly usable, and I don't think independent company will be able to fund it.
My experience has been that technology is far more likely to stagnate at BigCo than SmallCo - especially if SmallCo's only source of revenue is said technology.
I think down the line that would be true, but Facebook's willingness to burn literal billions of dollars at this point is basically the only thing carrying VR. Id love to see it split off in the future though.
I'm not sure big money is what is needed to create a flourishing VR sector. The appeal of VR has always been creating virtual experiences that are different and unique. honestly I think it makes much more sense for that scene to be decentralised and independent. Kind of like Minecraft came about, I have trouble imagining it as some sort big money project.
I don't think the issue with VR at this point is so much technical than it is that nobody's yet been creative enough to make something truly unique with it.
Agree. VR is not more than a novelty and gaming tool yet. Gaming is a huge potential, but I think the real use cases haven't been proven out yet.
I'm still a believer, but I suspect there are other non-VR technologies that either need to catch up or just figure out how to dovetail for VR to be anything other than a novelty.
I agree that this maybe should be illegal, but on the flip what is forcing the other companies to operate at a loss? I would think the name “Facebook” backing oculus means more than a low price
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.
At some point it needs to be illegal. When a large company of 30000 employees starts wiping out entire industries with cash buffers, you can see why this is just wrong and monopolistic/oligopolistic behavior.
There's a large difference between using your profits to crush competition in another area, versus setting dollar bills on fire in the pursuit of growth.
There should be regulations around both of these, but they'll need to be different ones.
considering some of the things that facebook has been used for it should be very careful about what it does with VR/AR and the potential for use as a HUD facilitating an attacker and providing them with a support team
I was interested in VR before FB bought Oculus and was considering it as an option. But the instant FB bought it I wrote it off as an option because I knew there would be fuckery down the road.
And guess what? If FB bans the FB account you're forced to link your Oculus to you, can't use it anymore.
1. That FB split into N independent companies, whereupon each share of FB would become 1 share in each of N companies.
2. That the supermajor shareholders (say, more than 10% of any company) each pick at most one company to retain that interest in, and sell off shares in the other companies until they had less than 10% of each of those).
3. That the new companies avoid overlapping directors.
It would be a long time in court. See the breakup of AT&T.
Will splitting off Instagram make a meaningful difference given how little protections there are around selling advertising data?
I agree we would’ve been better off if they had never been allowed to buy Instagram AND we had meaningful laws in place, but I don’t see how this fundamentally changes things given where we are now.
> It's unfair to Zuck for being very visionary about this.
I personally disagree with the idea that Zuck was being a "visionary" here. I don't think buying Instagram for $1bn was a particularly visionary move but rather just... cautious. Facebook also bought Gowalla, Lightbox.com, Friendly, TBH and tried to buy Snapchat, Musically (since merged into TikTok), Houseparty, etc. All these are/were competitors and threats. Some were small, some were big. Some worked out and grew, others didn't.
The Instagram acquisition happened fairly early on, so it makes sense that it was worth a lot of money to Facebook. Now that Facebook is huge it can get turned down by a company like Snapchat, and it'll just go ahead and copy/improve its features with its much-larger team, capital, and user-base. Back then, buying the competitor was the best option since Facebook didn't have as many resources or reasons to believe they could compete as effectively.
Moreover, I'd argue the reason Instagram worked out so well is precisely because it got acquired by Facebook. Had Instagram had to figure out its own monetization strategy, find its own clients, compete with the established players, build its own infrastructure, etc. it probably wouldn't have been able to grow as much or as quickly.
You don't just look at Instagram when you evaluate the acquisition, you look at Facebook also.
Facebook was huge, and Instagram didn't represent anything Facebook couldn't just build themselves, other than the growing user base. So there is your rationale, the behemoth shouldn't be completely free to consolidate users. Of course the details of how big is too big and so on are the hard part.
I'm holding off on merging my Oculus and Facebook accounts as long as possible in hopes that someone tells them to get the hell out of here with that nonsense.
And nothing will come of this except a slap on the wrist. I have more faith in the EU if fines are to be made big enough to make any difference at all.
Arguable. The antitrust cases against MS had a real and profound effect on the development of the first round of internet companies in the late 90's and early 2000's, even though it never went to a trial and verdict.
Unless they rewrote Whatsapp from ground up, the two platforms are not mixed. Whatsapp is written in Erlang where Facebook has transitioned from PHP to Hack to the best of my knowledge.
the code isn't the only infrastructure that can intermingle.
I think whatsapp runs on facebook's massive server farms with customized chips - which would hurt whatsapp probably if they need to find a different hosting.
I imagine there are probably a lot of other services that are shared or interact in some way - maybe shared email/notification services, 2fa services, data analytics/BI, monitoring etc...
I don't know how much they did with Whatsapp, but I do know they integrated the Facebook ad serving platform into Whatsapp. Breaking up Facebook and Whatsapp would cost Whatsapp that ad serving platform, which is probably nontrivial.
The way I see it, an important argument is that it won't solve the problem: these organizations take advantage of network effects to build monopolies and that mechanism won't go away. A good book on this is Who Owns The Future by Jaron Lanier.
Of course, forbidding anti-competitive acquisitions would have helped in that maybe then we'd all be using an independent Instagram under the leadership of its original founders and Facebook would be dying. But that still wouldn't change the fact that it would be more than likely to be a quasi monopoly. That's just the nature of social networks.
While they crush local competition, they also crush it in other countries. Google and Facebook/Whatsapp own a sizeable chunk of Internet interactions in just about every country except China, which in turns means more revenue which can be used to pay these insane Silicon Valley salaries to their workforce.
While I don't like these monopolistic practices, they have given the US a tremendous amount of power over communications abroad.
Argument for FB not being broken up would be “how does it harm the consumer?”. Sherman act doesn’t ban monopolies, it’s protects the consumer from being abused by the monopoly.
Yes, the argument is if you split them up their core value proposition is put into question. Apparently a very large group of users are on board with the core value proposition, and you are imposing on that group a ton of assumptions that the regulatory breakup and oversight will end up "working out better for everyone".
These companies are also vulnerable to competition in a fickle market. Tik Tok has gained massive ground and is on a similar trajectory that instagram was on some years ago. For everyone's claiming that FB stifles innovation, we have an obvious counterexample happening literally before our eyes.
> ... Facebook has maintained its monopoly position by buying up companies that present competitive threats and by imposing restrictive policies that unjustifiably hinder actual or potential rivals that Facebook does not or cannot acquire
Imagine if FB was broken up like old school monopolies. That would definitely open field to a lot of smaller social media startups. I am worried about consumer privacy impacts because it is easier to regulate one giant company than a myriad of smaller ones. Regardless, I say let's do it because monopolies and data stewardship are two separate problems and historically monopoly breakdowns did great things for innovation.
I could get behind this if the current ones actually followed regulation. FB are so entrenched that they don't have to follow the rules as they've demonstrated with Cambridge Analytica among a myriad of other issues with their platform.
> ... easier to regulate one giant company than a myriad of smaller ones
This sounds... incorrect.
Small players are much more vulnerable to fines and other penalties which range from 'cost of doing business' to 'slap on the wrist' for the big guys. And small ones don't seem to have much in the way of lobbying power or other direct influence over regulators.
Maybe more accurate to say that it's a bit harder to police lots of small players, but also that it's only the small players who produce good behaviour under regulation.
I actually disagree. Regulating a single giant company becomes an exercise in compliance, which American governments are absolutely terrible at. The single giant company has the resources to fight any action that could existentially threaten it. This winds up in its' own set of abuses.
In a robust market of smaller players the regulatory agencies can stick to rulemaking, investigation, and enforcement (civil fines/prosecutions), which is what they are great at. Smaller players don't have the resources to compete with the government and force them into regulatory trench warfare.
This is similar to the situation with the IRS — they spend most of their time auditing EITC cases, and other issues related to poor and middle class people. They don't have the resources to collect on the billionaires who have enough power to fight the government to attrition.
Everyone's talking about divesting Instagram and WhatsApp, but I would much prefer that the FTC ordered Facebook to acquire and accidentally kill TikTok.
Instagram and WhatsApp are old news. The big chip on the board is Oculus. If they can get Facebook to sever Oculus (and Facebook "Reality Labs", something probably created ahead of this to blur the lines at bit) it would be a huge step forward to mitigate huge harms to come from Facebook.
If you assume I'm talking about "VR" it shows you don't really have the same mental model of what they're trying to do at Oculus. They're creating a hardware/software proxy over your senses. This is the logical endpoint of computing. VR is just another transitional bridge.
So in 100 years you think we'll still be using flat rectangular displays to interface with computers? I'd happily bet against you if I'd still be around to collect.
Uh not really, Oculus has been working on AR for years and has prototype glasses in the field. They're probably ahead of Apple if I had to guess. VR is the bootloader for AR.
When Facebook first went public, an older relative asked me if he should invest in Facebook. My only insight was being an internet user at the time and I said no, there was no reason that Facebook wouldn’t be another MySpace. Facebook's only value was their users and users were historically very finicky and moved around platforms at will. I argued that Facebook would make no money and wouldn’t be around in a couple of years. This obviously turned out wildly wrong but I always thought the user moat was always an issue and Facebook’s downfall would be related to it. I guess what this lawsuit says is that they essentially just bought their way out of people platform jumping.
On the same note, a relative asked me the same thing when they IPO.I thought if Google could make money selling ads why couldn't Facebook. I bought in at IPO price for them. I sold for them about 2 years ago when the price was dropping due to privacy scandals.
Reddit is here. It has been a swift decline notable in the last year or so. Sadly. Even fairly uncontroversial assertions of fact are downvoted frequently
Not huffing at all, you basically just confirmed yourself my very affirmation: you pulled that out of thin air. Feel free to think it, still doesn't make it neither neither true, false nor demonstrable.
As to the pretentiousness of the thing, that's usually my take on people who feel fine talking about 330mil+ MAUs as a single person.
Opinion is opinion, thus me explicitly calling it opinion.
My take is honestly supported by the very concept of faulty generalization fallacy - given that you did confirm you based this claim on anecdotal evidence - if you ask me, but maybe that's just me.
I actually think it's good to have the community enforce/explain our standards from time to time, within reason. Dang can't see everything, and where he does it takes time to respond. Downvoting/flagging works too, but some may legitimately not know that they've broken a guideline.
I've been giving the wrong answer to "Should I buy Bitcoin" since 2011 or so. I was bearish on Amazon when its stock was at 60 because its P/E ratio was ridiculous. I've learned to just be comfortable with the fact that I'm wrong a lot.
I think I successfully communicated, and I'm getting upvoted, but my wording was imprecise. Would that I could edit to add: "[...] if you thought that is what it would do."
You can get USD for BTC right now, you've been able to get if for nearly a decade and there have never been as many reputable exchanges as there are now.
You said they "tend go down for maintenance" on "any big price swings" but were only able to muster one example of one exchange going down "for maintenance" on one price swing (Bitfinex).
The others, as the articles point out, were trade volume related (which is also a problem, but much less sinister).
There's no evidence this is some kind of grand conspiracy like you implied. There's plenty to criticise in Crypto, but little evidence for what you actually claimed.
No, I'm not challenging the premise, I'm challenging your framing.
Your comment implied sinister intent: That exchanges go offline at key times in order to scam people.
No evidence was provided of that. The sources you provided point to technical problems that are perfectly understandable during a massive, unpredicted surge in such a technically complex field.
there is no end. crypto will continue to swallow up all the world's capital and you'll be furious at how many leading zeros there are in your BTC-priced paycheck.
that's just delusion and cope. if the price keeps going up for years, then no matter what you think you're wrong. the market isn't being irrational, you are.
hahaha, don't sweat it mate. I'm right along there with you. I was surrounded by people dropping buckets of cash for GPUs back at the dawn of deep learning and was therefore naturally tempted to buy Nvidia's stock price (30$ at the time). In the end, I shied away due to the high PE too.
I take solace in the fact that some of biggest regrets or mistakes that Warren Buffet & Charlie Munger say they have made are those that you don't see - the deals they could have done but didn't and, in retrospect, should have.
lol should have consulted me. been bullish on long on FB since the $30s . Facebook was greatly profitable from the start. Fakebook's ad platform is a money-printing machine, similar to that of Google. Buying Instagram sealed the deal, killing its potentially biggest competitor.
That's good for you, but your tone is a little self-congratulatory here.
Not everybody's mental model of the world matches how events play out. It's a hard problem and a lot of folks conflate ideals with reality. It's also hard to see the big picture if you focus on certain aspects. It also doesn't help that not everyone plays with the same rule set.
Sometimes the more you know the harder it becomes.
>lol should have consulted me. been bullish on long on FB since the $30s .
Yeah that means absolutely nothing, you could have made 10x more bad trades in the same time. I'll "ask you" as you say when you have a proven strategy, not a simple lucky call.
I first bought after the clearly emotionally driven price dip at just under $20. It was obvious no one looked at the amount of hard cash they pulled in, and thought using their emotions.
At least in the case of instagram you didnt need hindsight to know it was a good deal. Lots of people thought they price they paid was incredible value on the day it was announced. Plenty of ink has been spilled that year about facebook potentially being in trouble with mobile and instagram seemed at the time to be an obvious solution to the problem.
That is not my recollection whatsoever. A quick read through the HN reactions that day (https://news.ycombinator.com/item?id=3817840) shows a mix of bewilderment and belief that this is a defensive play. Very few people actually opined that Instagram represented much actual value.
Yeah, I admit completely that I thought they were massively overpaying for Instagram at the time. I also shared the highest OP's sentiment that I didn't think FB was a good investment for the same reason (that people would migrate from FB to the next thing as fast as folks moved off of MySpace).
I was absolutely and utterly wrong on both accounts. Part of it was definitely wishful thinking, though, as I dislike FB by one or two orders of magnitude more than any other software company.
But yes, I'd say their acquisitions were not completely obvious slam dunks.
They also tried to be Snap, ofc, but my recollection is that Snap refused. Interestingly, folks have probably flip-flopped over the last few years in wondering whether that would've been good or bad for FB.
So true - a lot of people (me included) thought a billion dollars for Instagram seemed insane at the time. But it was possibly the deal of the century.
I would posit that you don't use that data to decide whether or not you should buy Instagram. You use that data to decide if you should clone Stories, build an events platform, etc. IOW, it's incredibly valuable to be able to see aggregate user behavior, which is why Amazon's ownership of so much of the commerce experience makes their introduction of competitive "Basics" so interesting/anti-competitive.
And it was a no-brainer that it was something that should never have been allowed to happen due to antitrust regulations. T-mobile had to jump through hoops to buy decrepit Sprint but tech companies get to buy whoever and whatever they want that allows them to expand even outside their niche and where their niche is going.
I don't have any inside info here, but they could have gotten much more granular information than how many people were using Instagram and WhatsApp.
For instance, daily time spent in using Instagram on a per-user basis, whether that use was associated with a drop in Facebook use, and how patterns in that relationship broke down across demographics.
I didn't think they were no-brainer acquisitions at the time, but they've certainly turned out to be in hindsight. Was Facebook just smart or lucky, or did they have a lot more data than we did to judge those decisions?
Funnily enough, the co-founder of Onavo (Guy Rosen) is now Facebook's "VP of Integrity," which probably speaks to FB's (lack of) commitment to integrity.
In hindsight, i think a big part is that myspace's reach extended mostly to early adopter internet users. Early adopters jump on ships early, but also jump off easily too. Once everyone's parents and grandparents jumped on to facebook, that's a much better moat.
Yes, I'm curious as to why DOJ announced Google and FTC announced Facebook actions right before the same group of people who nurtured their rise to monopoly status retake power.
One big difference between FB/MySpace is OAuth - you can dump FB the social network, but much harder to dump FB the identity verification service. OAuth in theory is great, in practice it has been an anti-competitive/anti-privacy Trojan Horse.
I still think you were correct, you just underestimated how long it would take for this to happen if the company was actually competent (unlike MySpace), and all the money that could be made in the meantime.
Facebook The Platform's userbase keeps getting older and less engaged, millennials and younger have largely shifted to instagram. Taken by itself, Facebook the platform doesn't have great looking prospects.
Instagram is the current hot thing, and is keeping Facebook The Company on the growth trajectory, but it too will suffer the same problem eventually.
Now that Zuck is under so much scrutiny, he won't be allowed to acquire the next hot social platform. When instagram isn't the "it" platform anymore, Facebook is doomed.
My prediction: if the US government does nothing, Facebook the company will slowly peak and then start shrinking over the next 5-10 years and the problem will start solving itself.
Their data moat becomes infinitely less valuable if the graph of users and engagement is a downward slope instead of an upward one.
> Now that Zuck is under so much scrutiny, he won't be allowed to acquire the next hot social platform. When instagram isn't the "it" platform anymore, Facebook is doomed.
Zuck got around that problem copying competitors lock, stock and barrel and using his monopoly to attempt drive out that competition.
Instagram was under threat by two "It" networks. Both of them ended up being copied in Instagram
Facebook needs to be broken up into three companies to fix it all.
How would breaking up Facebook into three companies fix this though? Suppose Instagram is a separate company and a new competitor starts getting popular. Why wouldn’t Instagram still just copy the competitor’s features?
It’s hard to compete with Instagram because everyone is already on Instagram, not because everyone is also on Facebook. (A lot of IG users don’t use FB much, and vice versa.) A freestanding Instagram could still easily copy and crush competitors.
Because if FB were split in three it would signal a definitive shift towards antitrust regulators actively applying the law. In that reality, all move-the-needle mergers would be subject to antitrust regulations that should have (but weren't really) applied to FB's previous acquisitions thus constraining IG's freedom to copy and crush.
I think the only real failure of anti-trust regulation was in the EU. They definitely should not have allowed the Whatsapp acquisition to go ahead.
I'm not sure on what grounds the US regulators would have blocked the Whatsapp acquisition, as it basically had no competition implications in the US.
The Instagram one is harder. Sure, it was a better version fo Facebook done right for mobile, but it only had 10mn users when acquired.
I'm not convinced that IG would have been successful if it hadn't been bought by Facebook. For an example of how things can go wrong, look at Snapchat vs Instagram.
Facebook was smart, it wasn't just a social network, it also was an apps and games platform. Remember Farmville? And also many bands ended up putting their merch and tour dates up on FB because it was just so easy.
Then recently it grew a marketplace to take on craigslist and ebay, and added videos (making it a mini youtube or tiktok).
And let's not forget that FB groups are the go-to place for many hobbies. Into old cars? Or old sewing machines? You won't find an active forum for those things, or if you do, they're 1000x more hostile and trollish than FB's groups.
So my question is, where do you draw the line? Was FB marketplace anticompetitive because it pushed out craigslist?
I guess this whole thing is a fishing expedition to see if the justice department can find a smoking gun email where someone says, like, "Let's be anticompetitive with snapchat" or something...
There are other marketplaces that proved the value of identity and reputation like Mercari and offerup in p2p before fb marketplace launched its own.
I do think FB would stomp or buy other marketplaces, but that there is even a smidgen of opportunity in this space in the US is due to the neglect of buckmaster and newmark.
They went from benevolent dictators to doggedly avoiding any increase in value to users.
This has happened at great detriment to Craigslist users who have been scammed, dealt with well-known but terrible landlords and wasted countless lifetimes due to the shoddy communication features of the site.
I am no fan of Facebook, but have only crocodile tears for Craigslist.
And don't FB have Jobs too? Their take on LinkedIN (and Glassdoor, etc) from 2017. I believe that didn't work out either, but I'm not sure, I see job posts floating in FB from time to time. Maybe another example of mixed domains that don't mix well, but I could be wrong.
Have you ever sold anything on Facebook Marketplace? It's shockingly easy. I'm relatively late to the party. When I used it for the first time earlier this year I felt like it was the wave of the future.
I was curious, so I just took a look. It feels like a flea market or a yard sale. Except there are people selling $1 PS5's and vehicles with 0 miles driven. Lots of noise on there. Plus you have to deal with selling face-to-face in a COVID environment. Honestly, it feels like Craigslist but somehow more scammy.
The location based nature really enhances the convenience. Also the connection with Facebook messenger and the fact that your camera is attached to the phone with the app. Like, I think if you decided to sell something right now and don't know anything about Marketplace then you could have an ad up within 3 minutes. It's sometimes even more convenient than throwing things away.
The lesson is never to answer the question with yes/no. Get them to come up with their own opinion, do their own research, and decide how much to invest in Facebook, if anything at all (it's not really a YES/NO but how much, and for how long...). If they don't want to do all this work... recommend SPY.
The way facebook is different is that it isn't just a social network, it IS your online identity. The fact that they make you use your real name rather than just some username is what made it work. And what continues to make it a more permanent part of who you are digitally. Facebook login makes it even more intertwined and hard to remove.
My mom asked me the same thing back in 2014 and I essentially felt the same way as you so I said the same thing. She bought some anyway though, and later sold when it hit $200. Glad she didn't listen to me.
Monopoly of what? Some other social networks I use every day or so: Twitter, LinkedIn, TikTok and various forums and communities like this one, which in my mind are pretty similar to a social network.
And since WhatsApp is a chat app, how about all the other chat apps I am using? iMessage, Slack, Teams.
Does this action has any merit or is it just the usual political posturing and games?
Could the average Facebook user readily replace their use of Facebook with LinkedIn or TikTok? I am not a big user of any of those products, but I have the distinct impression that the answer is no.
"The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices. Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. Here courts evaluate the anticompetitive effects of the conduct and its procompetitive justifications."
Does FB unreasonably restrain competition? (My answer is no)
Does FB have an alternative? (Mewe/Parler/Gab etc. - Mewe being the most direct alternative)
Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. - I'd say no.
The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem. The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this.
For a time people had few alternatives to Instagram or Facebook, which were effectively in competition with each other. This meant that has Facebook monetised your data more, ie increase prices, users were forced to pay if they wanted to stay on a popular social network.
TikTok is a recent phenomenon. Secondly it is not enough to consider the UX cost of switching to another platform but also the network effect. Is Mewe/Parker/Gab really a substitute for me if I don’t enjoy the network effects I have on Facebook or Instagram?
"The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem"
I don't use Instagram and have used Whatsapp prior to FB acquiring it. There has been no "roping in" of any sort that I have noticed, and while my experience is clearly anecdotal, there doesn't seem to be anything to link to that that I've observed. Perhaps I'm naive, but it would be good to see something concrete in this regard.
"The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this."
I guess I would call that profit-making, not "aggressive monetization". The alternatives exist and they are all easily accessible. Put yourself in their shoes - would you run a non-profitable enterprise? At what cost? Let's not lose touch with the fact that this is still a capitalistic economy.
Even politically it’s just ... weird. Most of the top content on Facebook each month is sympathetic to the current administration. Facebook has arguably played the most ball with them in comparison to other tech companies.
Yes, but FB are hated by both left and right (for entirely different reasons), so this is likely to actually go ahead.
The notion that FB increase ad prices by increasing the supply of ads is completely insane though, and I hope that's a misunderstanding by the parent poster.
FB/IG have an auction-based ads system, which means that you pay what other advertisers think the user is worth, rather than what you think the user is worth. In such a system, prices increasing (along with supply) is a symptom of massive, massive demand rather than a nefarious plot on FB's part.
Don't get me wrong, FB have done a bunch of shady stuff over the years, but this lawsuit seems pretty wrongheaded to me.
Hi I was referring to the cost of advertising for users not advertisers. Sure advertisers pay a cost based on an auction system which is subject to laws of supply and demand.
However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place.
As others have pointed out, anti-monopoly legislation os largely about preventing firms from abusing monopoly power to increase prices. If you consider the cost of using a social network to be the data the user provides, then the more data the user gives up to the use the social network, the higher the cost. Because of the strong network effect, users may have little choice but to stay on the platform if they wish to engage in the social network. The notion is that Facebook are abusing the stickiness of their social network by increasing monetisation of user data, knowing that users won’t easily leave.
By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.
> As others have pointed out, anti-monopoly legislation os largely about preventing firms from abusing monopoly power to increase prices. If you consider the cost of using a social network to be the data the user provides, then the more data the user gives up to the use the social network, the higher the cost.
Unfortunately this is a wildly speculative argument, which is unlikely to find favour with regulators in this case.
Even if it weren't speculative, how do you define the value of data? Is it by bits and bytes, or as the expected lift from incorporating it into a model? If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you.
> However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place.
This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost.
Additionally, if (hypothetically) one chooses to make advertising-supported websites illegal, then that leads to FB (and Google) shutting down, which I don't see as a net positive for the world. (Certainly most of their users wouldn't think so).
> By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.
So I don't agree with your argument about prices, so I'm not going to engage with it further (if you need to explain what a standard term means in the context of your argument, that's normally a warning sign).
However, IG had 20mn users when it got acquired. The consensus here was that it was a terrible idea and that FB would shut it down. We're now in a world where it has 1bn users and mints money for FB. Now, it definitely looks like FB acted badly.
But consider the alternative. FB are blocked from buying IG, so IG need to set up a sales team, an adevertising method and epxand globally. None of these things are cheap or trivial. There does exist a world where IG competes on a level-playing field independently, but I would argue that at least 80% of the time, this hypothetical leads to IG either under-performing or flaming out.
And to be fair, at the time of the IG purchase, the biggest threat to Facebook was mobile (once upon a time, FB had no ads on mobile).
Whatsapp again, should have been stopped by the EU, but there were little to no competition concerns raised within the US based on that acquisition, as nobody in the US used Whatsapp at the time.
> Unfortunately this is a wildly speculative argument, which is unlikely to find favour with regulators in this case.
I admit it is speculative but the argument encapsulates the abuse of the social network as I see it, which is why I'm running with it. It remains to be seen what angle the regulators will present when proving abuse of monopoly power.
However I cannot separate what Facebook is able to do on its social network without consequence from the idea that Facebook is an abusive monopoly.
> If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you.
Consider the "user price of improvement". Suppose that an initial model m1 only needs to regress on a users age, gender and location to guarantee a clickthrough rate of x%. As the social network grows and there are more users, a larger variety of adverts and longer engagements, all else fixed the clickthrough rate will go down if the users start seeing more irrelevant adverts (more ad bidders but same relatively static input features) as well as repeated adverts (longer engagement times but same input features).
In an effort to increase clickthrough rates either beyond x% or at least to maintain x% in a growing network, the model needs more express power. So m1 is expanded to m2 now using accumulated likes. Fine likes are activity which is generated on FB so that's fair game. But there's a small cost in user privacy: suddenly adverts can be targeted based on your likes.
The network grows and clickthrough rates must still be improved. m2 is expanded to m3 by incorporating activity with friends, including mutual likes. Again this is generated on the social network, but there is a privacy cost: adverts are served based on public and perhaps private interactions.
The network grows and clickthrough rates must still be improved. m3 is expanded to m4 using browser trackers, so now your activity outside of Facebook is used to serve adverts: the privacy cost is increased and suddenly becomes real. FB serves adverts to you based on anything you do on the internet.
<side note: I recently ordered widget A using my laptop browser and the next day I saw an advert on IG for widget A from a competitor on my mobile device. I don't have an FB account and I'm not logged into IG on my laptop browser. I have never seen adverts for widget A on IG until this moment>
Back to my argument. Now at this point FB has a strong social network based on your activity and your friends' activity as well as external network effects based on browsing trackers, log-in with FB identities, as well as your friends' external browsing activity.
The transition from m1 to m4 has required using more and more of your personal data (whether public or private) in order to maintain a clickthrough rate of x%.
> This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost.
Each time the model is improved by adding additional features, those features aren't acquired for free. They're acquired by deliberately mining users' personal information. You might not think this is the case, because data is data and data is stored in bits and bytes, but it has representational value that in many parts of the world (most notably the EU) is protected.
In other words, the change from m1 to m4 in order to serve adverts has incurred a cost in terms of the private data a user must give up in order to receive adverts that are relevant to them (ie maintain a clickthrough rate of x% or higher).
So yes in this sense it is a cost.
Furthermore, in the 21st century, data is a clearly a resource, and has monetary value. It can be mined and gathered from users, which is then used to generate revenue from advertising. Users are not compensated for their data but instead are provided with a free service. If the alternative was to pay for the service, what woul...
> > But consider the alternative. FB are blocked from buying IG, so IG need to set up a sales team, an adevertising method and epxand globally. None of these things are cheap or trivial. There does exist a world where IG competes on a level-playing field independently, but I would argue that at least 80% of the time, this hypothetical leads to IG either under-performing or flaming out.
Both of these outcomes are speculative, but I'm not convinced about the 80% figure. I'm not sure that IG needed FB alone to get to a billion users. Many of those users aren't necessarily people and are companies, organizations and other entities which use IG for engagement. It's enough that people spend more time on IG than FB the app or website to convince those entities to engage on IG. Not sure what the proportions are exactly but just giving an example.
IG had less than 20mn users when acquired, literally nobody cared about it outside of the early-adopter crowd in SF. In general, value comes from execution rather than the idea, and I am definitely not convinced that IG would be anywhere near where it is today without Facebook, which leads me to believe that breaking it off at this point is pretty unfair.
Like, another way FB could have competed would have been to buy IG and let it die slowly. Given this anti-trust suit, that would appear to have been the smarter move, but it definitely wouldn't be overall better.
Lets also note that FB became popular not just because it was good, but because it was good and always stayed up, regardless of user growth. That has probably been one of the major engines for IG growth.
Finally, the success of IG was also driven by the use of free advertising on FB, without that it would have taken a lot longer (and cost a lot more money) for them to reach the scale that they have now.
Again, thanks for replying. I'm still not convinced by your model of the cost of IG/FB, but I appreciate that it's reasonably well thought out.
Is there precedent for such a thing? Five or ten years after approving acquisitions and then saying 'oh our bad, that was anticompetitive' I'm not a fan of FB, was only a user briefly (though still maintain whatsapp) but find that this action is a misquided attempt to punish FB because some people can't accept its success and find the platform abhorrent.
> Does FB unreasonably restrain competition? (My answer is no)
The lawsuit specifically cites Zuckerberg talking about acquisitions (in this case, the failed Twitter acquisition) as giving "extra time... to get our product in order without having to worry about a competitor growing".
This is anecdotal but I started using TikTok during the pandemic and it has greatly reduced my use of Facebook. Mindlessly scrolling the TikTok ForYouPage is noticably superior to scrolling the Facebook feed
Likely just posturing and games. Looking at the share price, the market is not concerned. This is not at all like the DOJ suing MSFT in 1998. Likely FB will settle or it will be forgotten or overturned by incoming Biden admiration.
Having a Facebook account is a symbolic/emotional injury to a tech contrarian, but I don’t see the courts particularly caring about that. It’s not like you have to actually spend any time or money on it.
These don’t really compete with WhatsApp, which is cross platform, not tied to an employer, doesn’t require an invitation, subscription, friend network, setup to use, among other things.
Whatsapp has near universal market penetration globally, especially in countries where most people can’t afford iPhones and use iMessage.
Even in countries where iPhones are ubiquitous the cross-platform nature of Whatsapp and the fact that everyone from your friend to your grandmother is on it, makes it dominant.
Yes you could use Slack to message your friends like you would on Whatsapp. The experience won’t be the same, and setup will be a hurdle. But would you use Whatsapp to replace Slack at work?
I think the term “compete” is used very broadly here.
Fair point, I should have provided some sort of link. See the graph showing Top Messaging Apps by Country. South America, Africa, Asia is mostly Whatsapp. If you combine FB Messenger and Whatsapp, then FB controls most of the messaging market share in most regions, with a few notable exceptions like WeChat in China.
From the second link it appears that iMessage is not counted because it is preinstalled on iPhones and is not cross platform:
"4. iMessage
Communication apps like WhatsApp are available on practically all devices, whereas native apps like Apple’s iMessage (and now Apple Business Chat) are limited to one provider.
However, the user base for iPhone is constantly growing in the USA. A lot of adolescents prefer iMessage to apps like Snapchat in order to reach out to their friends.
Since iMessage is a pre-installed service of Apple, there are no official messaging usage statistics as they keep those “in-house”. Looking at the ever-growing demand and distribution of iOS devices though, we can assume that the pool of iMessage users is growing. In the fiscal year of 2017, Apple reached a quantity of 216.76 million iPhones."
I have anectada... basically everyone in my contact list has whatsapp... even all the iphone users. Mostly for the group chats.
iMessage no worky for groups because you'd be excluding the Android users. Group SMS... I don't think anyone over here is even aware that's an option. I only know about it from Americans on HN saying they use it.
Yet they can do so very easily at the flip of a button, so to speak. The capability exists, and simply because potential competitors choose to not compete in the same space is what makes WhatsApp a monopoly?
See Skype, for example - the largest market penetration for a period of time and practically no one uses them any more. They were video-centric, yet the user base is already there for an extension into a primarily text medium. Not tied to an employer, doesn't require an invitation, subscription, friend network, setup to use, etc...
And had they been able to, what do you think would’ve happened to Skype had it been acquired by Facebook back when it was the main game in town? I think that’s the point.
Whatsapp has other competitors currently. Telegram and Viber come readily to mind, and I am certain there are other services that I'm not aware of, the old fart that I am.
Whatsapp was incredibly popular in most of the underdeveloped world, where it became the de facto messaging app because of the low data requirements and ubiquitousness (and probable subsidies via the ISP provider). This was prior to FB buying them. Out of my group of contacts, the Telegram app notified me over the past year that roughly 2 dozen have signed up for it, e.g. That's another (albeit anecdotal) sign.
I understand the antagonism toward FB/Whatsapp/Instagram, given the consolidation of social networks within the purview of one entity, but not a single one of those services is a monopoly.
Could very well be I don't understand the intricacies of the law, and such consolidation is perhaps illegal for the betterment of society, but I'm not convinced that's the case still. Microsoft, for example, was accused of monopolistic behavior because they had enough power to pressure manufacturers to bundle IE with the OS. No such thing is happening in this situation. IANAL, but that's my simplistic take on it.
Instagram was not the "main game in town" when Facebook acquired them. It was one of many photo sharing/editing apps and had far less market penetration than it does today. Why should Facebook be punished for acquiring a promising app and turning it into what it is today by integrating it into its ecosystem?
Hindsight is 20/20 but at the time of acquisition it was far from a sure thing and it's safe to say that without Facebook resources Instagram would not be what it is today.
I remember when Instagram was acquired and it seemed like everybody was using them, they were getting mocked on the night TV and SNL, it certainly seems to me they had the primary mindshare and threat to the social media experience at the time.
Either you use WhatsApp or you don't talk to people.
And I'm not saying this is a bad thing, really.. I think "monopolies" have their place in standardizing things that we do and it makes it convenient.
(Side note: if fucking Apple would open up iMessage on android/windows they would OWN the chat market in a matter of minutes in the US)
But there does get to a point where you cannot say "people use it because they like it". Most people use it solely because everyone else uses it.
Just like Facebook. There is no "alternative" for real-life profile social media. If you want to use that type of social media, Facebook is the only thing whether you like it or not.
Facebook started off in a market with Orkut, Myspace, Friendster and along came Path, Twitter, Google+. Facebook had network effects and people gravitated towards it.
So this is basically saying network effect is bad. You cant get too popular.
That is where mandatory interoperability could help. We do not have insular e-mail systems that cannot communicate with one another. In case of IM, interoperability would go a long way towards reducing dominance of Facebook.
Yes, it’s network effects. One company with a large accepted network acquires another company with a large accepted network to avoid competing with it, and creating an even larger behemoth with services that will dominate both arms of that industry.
This case seems like a really stupid way to try to do some consumer protection versus writing laws that do it directly.
I’m still confused as to which “market” is harmed: advertisers? Facebook users? other social networks?
If the market is Facebook users, what’s the precedent in asserting this level of harm to a market that consists substantially of non-paying users of an inessential service?
Several people will say, "try not having a Facebook account and participating in X," where X is some mandatory part of your life, such as your children's schooling, keeping up with relatives, job-related stuff, social clubs or organizations, etc. It might not be impossible, but it's an undue burden in some cases.
It's impossible to keep up with college affairs without Facebook, as a Facebook group is the primary method of communication and organization.
It was even worse before the pandemic, since there were no MS Teams or Google Classrooms for each subject. If an assignment was released, it was the representative's Job to male sure it reaches everyone. Guess what did they use?
Oh the assignment is delayed? TA announces on Facebook group. Midterms Time table? College Facebook page. All college-wide announcements were made through its Facebook page.
Facebook is practically essential for college life. You could say it's the College's fault, but that's not our discussion. What's important is that I can't delete my Facebook without causing a lot of pain in the ass for myself.
>I’m still confused as to which “market” is harmed: advertisers? Facebook users? other social networks?
Even with scare quotes it's not a multiple: the social network of Facebook users is an advertising market. You don't have to be a snot-nosed growth hacker to see that FB has a monopoly position in advertising.
Here's a test: does FB have any reason to care about the quality of whatever is being advertised in any one ad? Where are you going to advertise if FB keeps putting your ads for your doctor's office next to ones for a child-rape rock opera and/or "COVID-19 is a hoax" seminars? What is your recourse, switching your advertising to Parler and LinkedIn? NYTimes dot com? The 72 next most popular social networking sites around the world? Surely VKontakte runs a clean house.
Again, look at railroads. In the Trust era, trains were not the product, were not the market. Transportation was.
How is it possible to abuse a market position when there are thousands of active competitors threatening to eat Facebook's lunch in each of the areas it leads in? The app stores and web are still full of social media upstarts
Because it wasn't wrong at the time of the acquisition, IG as a company had 13 employees and 10m DAU, everyone was clowning on FB for wasting their money. The company would have went nowhere without FBs network effect, after all it's entire feed was based on pictures posted on FB. FB is just a political scapegoat just like Goog, if we were interested in antitrust we'd be knocking on AT&T's door and not giving them more grant funding every year.
That's right, they approved Whatsapp, everyone laughed at the instagram acquisition because they paid 1b and the company had 13 employees and 10m DAU. The company would be nowhere without FB.
This is a constant misconception in these discussions but antitrust litigation and penalties don't require there to be a monopoly.
The allegation here is anti-competitive behavior. There are plenty of things you an do that are anti-competitive and illegal without actually achieving a monopoly. The classic example is price fixing but there are many others.
Unsurprisingly, the actual linked article in this thread spells out these allegations of anti-competitive actions on Facebook's part.
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 being viable in any way, other than to mention the wagons and horses of the internet. This is not to comment on a level of sophistication, but features. What can you sell on TikTok through TikTok? It's a category error to equate them with FB. Facebook has cultivated this state of affairs, and they have gone out of their way to interfere with the success of companies it views as competition.[2]
This is even before we get to the use of Facebook to create negative externalities, for which it provides powerful tools. On purpose.
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.
I don't understand, are you saying something like "Oreo has a monopoly on being Oreos?" If so, that's a pretty naive and narrow conception. In other words, "no, that isn't the problem."
> illegally maintaining its personal social networking monopoly
"Monopoly" is a term that's fairly overloaded/misunderstood; while in economics refers specifically to a situation where there is a single supplier for a good/service (https://en.wikipedia.org/wiki/Monopoly#Market_structures), in the legal definition "monopoly power" is defined much more loosely, as "the power to control prices or exclude competition" in the US (e.g. https://www.justice.gov/atr/competition-and-monopoly-single-...), and there are complex tests for monopoly power in the EU including >50% market share which I'm less familiar with.
I think common discourse tends to interpret monopoly in the economics sense, which leads to confusion when we look at antitrust enforcement like this. Not to mention that under antitrust laws you don't even need to have (loosely defined) "monopoly power" to be engaging in illegal anticompetitive behaviors.
Specifically analyzing those competitors:
LinkedIn is a business social network, not a personal social network as they define it. Forums are not "social networks" as commonly defined (graph of relationships).
Twitter is a competitor, but they have far less market share, e.g. see https://www.t4.ai/industry/social-media-market-share#:~:text... which puts Facebook at 69% of social media users, (a monopoly in most definitions), while twitter is at ~8%. Somewhat confounding because users can be on both, but the magnitudes are what's important.
I think Ben Thompson has the best analysis of antitrust as it pertains to Facebook, as he deeply understands the market dynamics that give Facebook and other large tech companies their market power, e.g. see https://stratechery.com/2017/manifestos-and-monopolies/.
My guess is that this will end up the same was as the Microsoft case. Building network effects is not anti-competitive behavior. FB will argue that they are in fierce competition with Google in the market where they make their revenue, advertising. Not really relevant what the relative market concentration is in other non-revenue generating markets (social networking / search), which are only used to generate attention for the ads they sell in a market where FB's relative market power is < 50%.
> The complaint also alleges that Facebook, over many years, has imposed anticompetitive conditions on third-party software developers’ access to valuable interconnections to its platform, such as the application programming interfaces (“APIs”) that allow the developers’ apps to interface with Facebook. In particular, Facebook allegedly has made key APIs available to third-party applications only on the condition that they refrain from developing competing functionalities, and from connecting with or promoting other social networking services.
On one hand, forcing Facebook to open up its social graph would have serious privacy implications.
On the other, it would provide an incredible boost to any new social network, which could quickly bootstrap off your existing friends. That's what Instagram did with Twitter and what Vine did with Facebook.
The most important feature of a social network has always been whether your friends/family use it. If any new social network can take advantage of Facebook's social graph via API, that neutralizes this advantage. Now Facebook is forced to compete by being a better social network, not just a bigger one.
> On one hand, forcing Facebook to open up its social graph would have serious privacy implications.
There shouldn't be much additional privacy concern with a Facebook user saying "I trust user Alice and service example.com, so please send all my posts to alice@example.com using ActivityPub."
Similarly, Alice should be able to tell example.com that she trusts the Facebook user Bob with ID 123456789, so that example.com sends her posts to Facebook addressed to Bob (perhaps authenticated with a pre-shared key that Bob emailed her).
Once users are free to move between providers, those providers can compete based on their level of privacy and security, which right now Facebook has little incentive to improve.
I'd agree with you in theory, but in practice, those API endpoints end up being exploit vectors for data leakage in various ways - either through actual security vulns or through the security vulnerability that exists between the monitor and the chair.
It's worth noting that part of Facebook's culpability regarding Cambridge Analytica is that the CA "personality survey" was able to gather "personally identifiable information such as real name, location and contact details" of participating users, and also "the app did the same thing for all the friends of the user who installed it".[0]
I suppose that a lot of personal data could be gleaned about someone (and their friends) from a rogue ActivityPub node reading the posts that were federated with it, but people would be suspicious if, for example, Mastodon suddenly started asking users for their phone number, Social Security number, and a picture of their driver's license.[1] And people would be very unlikely to sign up to a node which was actually run by Cambridge Analytica, right?[2]
Opening up the social graph seems almost exclusively a privacy concern. The examples you bring up between Instagram / Twitter are primarily about marketing and onboarding new users to competing services. This isn't actually going to lead to much user conversion unless the competing service is actually meaningfully more interesting. If it is meaningfully more interesting, then users will share it on their own (see Tik Tok), rather demonstrating that regulating the social graph is completely pointless.
Good. Facebook owns so much of the ad market now, and their support is non-existent. They have run ads that I didn't want running at all, haven't let me pause them, and haven't responded to support requests through their platform or through social media. I am really worried about what happens if they keep growing.
Hilarious that FB is being targeted for Instagram and Whatsapp when there's plenty of competition in the market. And somehow Google get's a free pass and so does Amazon.
Not a lawyer, but I'm really curious to see how this plays out. This case has a lot of confounding factors:
* other companies/entities that can be considered "competitors" (Twitter, TikTok, LinkedIn, etc)
* the acquisitions in question (Instagram and WhatsApp) being approved by the suing entity (namely, the FTC) themselves back in the day
I wouldn't be surprised if an outcome of this were to be say, limits against cross-linking acquisitions together or the like in the future. However, having existing companies be forced to be spun out in their entirely... I have a hard time imagining that being the outcome, given the chilling effect it could have on the rest of the industry.
> What would be the precedent if regulatory approvals could be challenged with a change in administration?
That's like someone is approved for a license to own a gun, then that person uses the gun to commit a crime, and then their license is revoked. Then someone points the finger at whoever it was that approved that person for a gun license.
What would be the precedent if a merger approval gave you a free pass to be anti-competitive?
> However, having existing companies be forced to be spun out in their entirely... I have a hard time imagining that being the outcome, given the chilling effect it could have on the rest of the industry.
What's hilarious is that breakups and divestiture were considered a completely commonplace occurrence up until a generation ago. It was just a matter of course for the FTC and DOJ to deal with companies that had gotten too big or were engaging in questionable behavior and forcing them to break up into pieces.
This, of course, was generally a good thing. Then we just sort of stopped. Now we're at a point where your point of view, which is that this is "hard to imagine" is a completely reasonable one.
It shouldn't be though. The current situation of consolidation at the top of our economy is wildly unstable and harmful to workers, consumers, and fledgeling entrepreneurs alike, and we should never have let it get this out of control.
I'm also not a lawyer, but this sounds unconstitutional. This lawsuit sounds even more extreme than ex post facto laws, since antitrust laws haven't changed.
My pet theory is that the legislature is so divided and incompetent that laws are horribly outdated. The other two branches of government need to compensate. Google v. Oracle is another example of this.
Article 1, §9 specifically forbids the Congress from passing any ex post facto laws, and §10. does the same for the states. Since the FTC already gave consent the first time around, this hinges on whether the FTC as an independent agency is considered a proxy for Congress. Note that the attorney generals' separate suit does not have this concern.
Does that prevent Congress from passing laws criminalizing ongoing behavior by corporations, or just from prosecuting acts from before the law was passed?
Not a lawyer answer: the latter. Note, though, that a law criminalizing behavior specific to one person or corporation could be considered a bill of attainder, which is prohibited by the same clauses in the constitution.
You bring up an interesting point, but the Sherman and Clayton laws were passed over a century ago. Perhaps the FTC went against the will of Congress by approving them in the first place, which brings up its own questions around administration of the laws by the executive branch.
I'm not trying to troll but the reaction to "It's my f*cking data!" should be to seriously look into projects like Urbit. Where you do in fact own and control your own data.
How would splitting Instagram work from a technical perspective? Engineers have spent 8 years building shared code and data centers for FB and IG. I'd expect it would take hundreds of people and multiple years to untangle them.
As far as I know the biggest change was hosting the pictures on Facebook server infrastructure. So it requires copying the pictures to another infrastructure and replacing the URLs ? Of course it will be a huge task but I don't think that FB and IG are sharing a lot of code.
The biggest challenge would be the advertising. Moving photos is far easier.
Replicating and building out an ad platform like FBs from zero would be very very hard. None of the other social platforms ad networks are even close in quality but especially interface/targeting/features. Snap / TW I would say are at maybe 5% if I had to pick a number...
Especially especially taking into account integration with FB pixel.
Photo hosting might have been the biggest immediate change back in 2012, but since then there have been a lot of features added to IG that share a lot with FB. You've probably seen things like recommendations of people to follow in IG based on FB Pages that you've liked, etc. And video streaming infrastructure is shared, and that's much more complicated than photos.
The thing is, technically it's actually far more difficult to integrate than it is to separate.
Facebook has been trying to make it appear that integration will make separation impossible.
But the reality is, you simply duplicate the databases and whatever shared services they depend on, and create a "stub" FB backend for IG, and a "stub" IG backend for FB for the shared services to work... and they go on their merry independent ways, while engineers remove things that depend on the stubs at their leisure.
Obviously it's not trivial (and involves the inherent complexities of any datacenter migration), and doing it without downtime is a whole separate beast, but it's not impossible or so wildly difficult it can't be carried out. In other words, there's zero reason it should be a factor in the legal outcome.
At most, there would be an IP issue -- e.g. would the spun-out IG be permitted to have a stubbed FB backend, and vice-versa -- but that's easily solved by providing those permissions as part of the separation agreement, with a timeline to remove them (e.g. 2 years).
If you work at Facebook it's time to seriously consider leaving to avoid damage to your own brand. Future employers are going to be scrutinizing your record and will ask you difficult questions about why you stuck by Facebook despite an overwhelming consensus that they are damaging to the global social fabric.
Even Bill Gates has cleaned up his reputation, let alone engineers who worked at MS in monopoly days. I don't think anyone that was there at the time is worried about how it reflects on them personally.
The most interesting part to developers: they may require facebook to offer certain APIs?
> The complaint also alleges that Facebook, over many years, has imposed anticompetitive conditions on third-party software developers’ access to valuable interconnections to its platform, such as the application programming interfaces (“APIs”) that allow the developers’ apps to interface with Facebook. In particular, Facebook allegedly has made key APIs available to third-party applications only on the condition that they refrain from developing competing functionalities, and from connecting with or promoting other social networking services.
> The complaint alleges that Facebook has enforced these policies by cutting off API access to blunt perceived competitive threats from rival personal social networking services, mobile messaging apps, and other apps with social functionalities. For example, in 2013, Twitter launched the app Vine, which allowed users to shoot and share short video segments. In response, according to the complaint, Facebook shut down the API that would have allowed Vine to access friends via Facebook.
Making API's available "only on the condition that [developers] refrain from developing competing functionalities" is one thing; and I can see how that seems anticompetitive, I dont' know enough about the law to say when anticompetitive is illegal.
But that second one is more interesting. "shut down the API that would have allowed Vine to access friends via Facebook" -- they didn't just not have Vine have access to it, they removed it, and that is being complained about. The implication to me seems to be that facebook must provide certain API's to avoid anticompetitive behavior?
The API I personally most miss and am interested in is Events. My interest is definitely in reducing facebook's lock on users. A lot of people I know find missing out on events the hardest reason to leave facebook, and if an API was available show Facebook events on other platforms, it would definitely aid people in leaving Facebook, which is I presume exactly why Facebook got rid of the API, which sounds pretty similar to the Vine complaint, although I don't know whether there was a specific facebook competitor threatening them with events integration. I would be thrilled if the FTC made Facebook restore an Events API, hopefully in a way that was sufficiently full-featured for the kinds of integrations that would help people get off facebook. ("Help people get off", it sounds like an addiction, yup).
This to me is the only compelling argument and I personally hope the government makes this successfully. Trying to look at IG/WhatsApp acquisitions is dumb imho.
But FB has consistently introduced open APIs and features, let them gain traction, then shut them down and replicated the most popular features.
I have been burned multiple times. Most recently new restrictions on Messaging.
If FB was mandated to restore some APIs possible make new ones for interoperability (while keeping the privacy changes over the years) that would be super super valuable to help other companies make value without trying some fruitless and probably not sound breakup.
Most of there APIs are for preferred partners only, see for example their ecommerce, whatsapp or events apis, almost nothing can be accessed by a programmer working on his own.
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[ 0.20 ms ] story [ 379 ms ] thread> The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp
From an entrepreneurial point of view I wonder how it will affect the future of big tech players acquiring other companies.
It won't.
The full power of the United States does not reverse all those shares you sold to a big tech company, or sold as a big shareholder of a big tech company.
If the market tolerates a price, based on their own exuberance and view of future revenues, that is fine here, and the incentives will continue to promote near term profits with a who-gives-a-shit slim possibility of cleanup by the regulators.
Corporations are just a conduit for money, and the regulators only enforce actions on the conduit, and thats a maybe.
I know it's a pipe dream, but an independent Oculus would make me so happy. I suspect this is impossible due to the early nature of the VR market. Maybe just an FTC requirement _not_ to require a FB login?
It appears VR is still too small of a market for them to care about.
1) VR ever becoming a huge player. It might. It might not. Right now there's no real evidence that VR will actually become a big deal, and Facebook could argue that this is a niche offering that can't be anti-competitive because there's no real market yet.
2) The feasibility of VR technology independent of major vendors. There's a strong possibility that without a huge R&D budget VR will never overcome the hurdles that might keep it out of the mainstream. Facebook could argue that removing Oculus would doom VR to failure in the market.
3) The Sirus/XM merger removed 100% of satellite radio competition (there's only one vendor left after the merger), but both Sirius and XM successfully argued that the market isn't big enough to support multiple vendors. Facebook could argue a similar case, that for the health of the VR market there should be fewer competitors.
I'm not a lawyer so I don't know if any of those would be winning arguments, but based on previous anti-trust cases I've followed that would be the strategy I would expect. And it might be why the FTC didn't go down that path.
-What if a lot of people use these in the future
-What if they're really comfy when they get slim, and people use them all the time, even for essentially web browsing.
-Later models can easily have internal and mouth facing cameras so you can smile at people in VR
-Let's intimately observe the finest twitch of every expression felt by our users, peering deep into their minds, learning more about how to manipulate and destroy humans than anyone ever thought possible.
(Apologies to George Orwell.)
What would you do with it? What wouldn't you do with it?
Oh what’s that? Your eyes looked at the logo on the shirt the hero is wearing, are you perhaps interested in learning more about where you could buy it?
While that would cool for short-term, independent Oculus can stagnate. VR still needs many more billions to be truly usable, and I don't think independent company will be able to fund it.
My experience has been that technology is far more likely to stagnate at BigCo than SmallCo - especially if SmallCo's only source of revenue is said technology.
I don't think the issue with VR at this point is so much technical than it is that nobody's yet been creative enough to make something truly unique with it.
I'm still a believer, but I suspect there are other non-VR technologies that either need to catch up or just figure out how to dovetail for VR to be anything other than a novelty.
Only when AR is a thing will they stat to push for profitability.
This should be illegal. Amazon and Uber have wiped out small players.
In terms of loss, the actual hardware is profitable as far as I've heard.
There should be regulations around both of these, but they'll need to be different ones.
And guess what? If FB bans the FB account you're forced to link your Oculus to you, can't use it anymore.
Unbelievable behvior.
1. That FB split into N independent companies, whereupon each share of FB would become 1 share in each of N companies.
2. That the supermajor shareholders (say, more than 10% of any company) each pick at most one company to retain that interest in, and sell off shares in the other companies until they had less than 10% of each of those).
3. That the new companies avoid overlapping directors.
It would be a long time in court. See the breakup of AT&T.
https://money.cnn.com/infographic/technology/att-merger-hist...
Worst case: there's a lot of legal kerfuffle and he is a multi-billionaire
I agree we would’ve been better off if they had never been allowed to buy Instagram AND we had meaningful laws in place, but I don’t see how this fundamentally changes things given where we are now.
* No ads (lol)
* Competition from Google even if it did have ads
* FB had no competitive photo app
Instagram for $1B? WhatsApp for $17B? Really?
FTC definitely isn't competent enough to understand how visionary the acquisition was.
To be fair, not many was that competent. Otherwise, Google and other cash-loaded companies would have acquired these companies with higher offer.
It could have easily been Twitter + Vines + Periscope where the acquired products went nowhere.
It's unfair to Zuck for being very visionary about this. But antitrust isn't about being fair to an individual company...
Maybe that's a sign that the acquisitions deserved more scrutiny?
But everyone will make up a number to support whatever side of the argument they are on.
In any case, Whatsapp as a standalone company would definitely go bankrupt. The infra cost would be insane with such little revenue.
I personally disagree with the idea that Zuck was being a "visionary" here. I don't think buying Instagram for $1bn was a particularly visionary move but rather just... cautious. Facebook also bought Gowalla, Lightbox.com, Friendly, TBH and tried to buy Snapchat, Musically (since merged into TikTok), Houseparty, etc. All these are/were competitors and threats. Some were small, some were big. Some worked out and grew, others didn't.
The Instagram acquisition happened fairly early on, so it makes sense that it was worth a lot of money to Facebook. Now that Facebook is huge it can get turned down by a company like Snapchat, and it'll just go ahead and copy/improve its features with its much-larger team, capital, and user-base. Back then, buying the competitor was the best option since Facebook didn't have as many resources or reasons to believe they could compete as effectively.
Moreover, I'd argue the reason Instagram worked out so well is precisely because it got acquired by Facebook. Had Instagram had to figure out its own monetization strategy, find its own clients, compete with the established players, build its own infrastructure, etc. it probably wouldn't have been able to grow as much or as quickly.
But seriously, by what rationale would you block the purchase in 2012? Instagram only had 25 million users at the time.
Facebook was huge, and Instagram didn't represent anything Facebook couldn't just build themselves, other than the growing user base. So there is your rationale, the behemoth shouldn't be completely free to consolidate users. Of course the details of how big is too big and so on are the hard part.
I'm holding off on merging my Oculus and Facebook accounts as long as possible in hopes that someone tells them to get the hell out of here with that nonsense.
This decade is going to be lit.
Interesting that it seems to focus so heavily on acquisitions.
It would be quite the twist though if Kevin Systrom testified for the FTC against FB, though.
https://heavy.com/tech/2018/10/facebook-block-minds-com-unse...
I imagine there are probably a lot of other services that are shared or interact in some way - maybe shared email/notification services, 2fa services, data analytics/BI, monitoring etc...
Give both companies the ad platform source code.
Question: is there an argument not to split up these gigantic corporations?
Of course, forbidding anti-competitive acquisitions would have helped in that maybe then we'd all be using an independent Instagram under the leadership of its original founders and Facebook would be dying. But that still wouldn't change the fact that it would be more than likely to be a quasi monopoly. That's just the nature of social networks.
While I don't like these monopolistic practices, they have given the US a tremendous amount of power over communications abroad.
These companies are also vulnerable to competition in a fickle market. Tik Tok has gained massive ground and is on a similar trajectory that instagram was on some years ago. For everyone's claiming that FB stifles innovation, we have an obvious counterexample happening literally before our eyes.
Imagine if FB was broken up like old school monopolies. That would definitely open field to a lot of smaller social media startups. I am worried about consumer privacy impacts because it is easier to regulate one giant company than a myriad of smaller ones. Regardless, I say let's do it because monopolies and data stewardship are two separate problems and historically monopoly breakdowns did great things for innovation.
This sounds... incorrect.
Small players are much more vulnerable to fines and other penalties which range from 'cost of doing business' to 'slap on the wrist' for the big guys. And small ones don't seem to have much in the way of lobbying power or other direct influence over regulators.
Maybe more accurate to say that it's a bit harder to police lots of small players, but also that it's only the small players who produce good behaviour under regulation.
In a robust market of smaller players the regulatory agencies can stick to rulemaking, investigation, and enforcement (civil fines/prosecutions), which is what they are great at. Smaller players don't have the resources to compete with the government and force them into regulatory trench warfare.
This is similar to the situation with the IRS — they spend most of their time auditing EITC cases, and other issues related to poor and middle class people. They don't have the resources to collect on the billionaires who have enough power to fight the government to attrition.
http://www.mtv.com/news/2460774/miyamoto-wants-nintendo-to-f...
Can you trick my eyes into focusing on infinity when the actual focus point is three cm away? Maybe?
Can you trick my inner ear into accepting the virtual reality? Ok, how?
AR is a different story, but Oculus would be starting from zero on an AR play, the only company with a genuine head start is Apple.
As to the pretentiousness of the thing, that's usually my take on people who feel fine talking about 330mil+ MAUs as a single person.
As opposed to your opinion that is empirically flawless and unquestionable?
My take is honestly supported by the very concept of faulty generalization fallacy - given that you did confirm you based this claim on anecdotal evidence - if you ask me, but maybe that's just me.
https://news.ycombinator.com/newsguidelines.html
> Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills.
https://news.ycombinator.com/newsguidelines.html
https://github.com/minimaxir/hacker-news-undocumented
Imagine, for instance, trying to get actual USD (NOT USDT!) for BTC when that fever dream ends.
I'm not saying it's never happened, but implying it's some sort of repeating pattern is simply false.
https://www.forbes.com/sites/billybambrough/2020/05/20/sudde...
https://cryptopotato.com/bitfinex-offline-goes-in-unschedule...
The others, as the articles point out, were trade volume related (which is also a problem, but much less sinister).
There's no evidence this is some kind of grand conspiracy like you implied. There's plenty to criticise in Crypto, but little evidence for what you actually claimed.
Your comment implied sinister intent: That exchanges go offline at key times in order to scam people.
No evidence was provided of that. The sources you provided point to technical problems that are perfectly understandable during a massive, unpredicted surge in such a technically complex field.
Way beyond giving them the benefit of the doubt at this point.
I take solace in the fact that some of biggest regrets or mistakes that Warren Buffet & Charlie Munger say they have made are those that you don't see - the deals they could have done but didn't and, in retrospect, should have.
Not everybody's mental model of the world matches how events play out. It's a hard problem and a lot of folks conflate ideals with reality. It's also hard to see the big picture if you focus on certain aspects. It also doesn't help that not everyone plays with the same rule set.
Sometimes the more you know the harder it becomes.
It's hard.
Yeah that means absolutely nothing, you could have made 10x more bad trades in the same time. I'll "ask you" as you say when you have a proven strategy, not a simple lucky call.
The "Onvao Protect" traffic snooping VPN to identify what up and coming products people were using was one particularly shady part of this strategy.
And hindsight is 20/20.
I was absolutely and utterly wrong on both accounts. Part of it was definitely wishful thinking, though, as I dislike FB by one or two orders of magnitude more than any other software company.
But yes, I'd say their acquisitions were not completely obvious slam dunks.
They also tried to be Snap, ofc, but my recollection is that Snap refused. Interestingly, folks have probably flip-flopped over the last few years in wondering whether that would've been good or bad for FB.
For instance, daily time spent in using Instagram on a per-user basis, whether that use was associated with a drop in Facebook use, and how patterns in that relationship broke down across demographics.
I didn't think they were no-brainer acquisitions at the time, but they've certainly turned out to be in hindsight. Was Facebook just smart or lucky, or did they have a lot more data than we did to judge those decisions?
FB buying up the competition probably helped too.
Which the FTC could have stopped at any time.
I don't follow usa politics all that closely, so i'm honestly curious how specificly were they cozy?
Facebook The Platform's userbase keeps getting older and less engaged, millennials and younger have largely shifted to instagram. Taken by itself, Facebook the platform doesn't have great looking prospects.
Instagram is the current hot thing, and is keeping Facebook The Company on the growth trajectory, but it too will suffer the same problem eventually.
Now that Zuck is under so much scrutiny, he won't be allowed to acquire the next hot social platform. When instagram isn't the "it" platform anymore, Facebook is doomed.
My prediction: if the US government does nothing, Facebook the company will slowly peak and then start shrinking over the next 5-10 years and the problem will start solving itself.
Their data moat becomes infinitely less valuable if the graph of users and engagement is a downward slope instead of an upward one.
Zuck got around that problem copying competitors lock, stock and barrel and using his monopoly to attempt drive out that competition.
Instagram was under threat by two "It" networks. Both of them ended up being copied in Instagram
Facebook needs to be broken up into three companies to fix it all.
It’s hard to compete with Instagram because everyone is already on Instagram, not because everyone is also on Facebook. (A lot of IG users don’t use FB much, and vice versa.) A freestanding Instagram could still easily copy and crush competitors.
I'm not sure on what grounds the US regulators would have blocked the Whatsapp acquisition, as it basically had no competition implications in the US.
The Instagram one is harder. Sure, it was a better version fo Facebook done right for mobile, but it only had 10mn users when acquired.
I'm not convinced that IG would have been successful if it hadn't been bought by Facebook. For an example of how things can go wrong, look at Snapchat vs Instagram.
Then recently it grew a marketplace to take on craigslist and ebay, and added videos (making it a mini youtube or tiktok).
And let's not forget that FB groups are the go-to place for many hobbies. Into old cars? Or old sewing machines? You won't find an active forum for those things, or if you do, they're 1000x more hostile and trollish than FB's groups.
So my question is, where do you draw the line? Was FB marketplace anticompetitive because it pushed out craigslist?
I guess this whole thing is a fishing expedition to see if the justice department can find a smoking gun email where someone says, like, "Let's be anticompetitive with snapchat" or something...
There are other marketplaces that proved the value of identity and reputation like Mercari and offerup in p2p before fb marketplace launched its own.
I do think FB would stomp or buy other marketplaces, but that there is even a smidgen of opportunity in this space in the US is due to the neglect of buckmaster and newmark.
They went from benevolent dictators to doggedly avoiding any increase in value to users.
This has happened at great detriment to Craigslist users who have been scammed, dealt with well-known but terrible landlords and wasted countless lifetimes due to the shoddy communication features of the site.
I am no fan of Facebook, but have only crocodile tears for Craigslist.
good lesson in there that some domains just don't mix
And Facebook login being "necessary"?... Never used it. Never will.
And since WhatsApp is a chat app, how about all the other chat apps I am using? iMessage, Slack, Teams.
Does this action has any merit or is it just the usual political posturing and games?
"The antitrust laws prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power. Most Section 2 claims involve the conduct of a firm with a leading market position, although Section 2 of the Sherman Act also bans attempts to monopolize and conspiracies to monopolize. As a first step, courts ask if the firm has "monopoly power" in any market. This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices. Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. Here courts evaluate the anticompetitive effects of the conduct and its procompetitive justifications."
Does FB unreasonably restrain competition? (My answer is no)
Does FB have an alternative? (Mewe/Parler/Gab etc. - Mewe being the most direct alternative)
Then courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. - I'd say no.
I don't see anything this lawsuit stands on.
[1] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
For a time people had few alternatives to Instagram or Facebook, which were effectively in competition with each other. This meant that has Facebook monetised your data more, ie increase prices, users were forced to pay if they wanted to stay on a popular social network.
TikTok is a recent phenomenon. Secondly it is not enough to consider the UX cost of switching to another platform but also the network effect. Is Mewe/Parker/Gab really a substitute for me if I don’t enjoy the network effects I have on Facebook or Instagram?
I don't use Instagram and have used Whatsapp prior to FB acquiring it. There has been no "roping in" of any sort that I have noticed, and while my experience is clearly anecdotal, there doesn't seem to be anything to link to that that I've observed. Perhaps I'm naive, but it would be good to see something concrete in this regard.
"The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this."
I guess I would call that profit-making, not "aggressive monetization". The alternatives exist and they are all easily accessible. Put yourself in their shoes - would you run a non-profitable enterprise? At what cost? Let's not lose touch with the fact that this is still a capitalistic economy.
It will be interesting to see the government prove this for Facebook while ignoring the 800lb gorillas of Google/Doubleclick or Amazon’s ad network.
The notion that FB increase ad prices by increasing the supply of ads is completely insane though, and I hope that's a misunderstanding by the parent poster.
FB/IG have an auction-based ads system, which means that you pay what other advertisers think the user is worth, rather than what you think the user is worth. In such a system, prices increasing (along with supply) is a symptom of massive, massive demand rather than a nefarious plot on FB's part.
Don't get me wrong, FB have done a bunch of shady stuff over the years, but this lawsuit seems pretty wrongheaded to me.
However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place.
As others have pointed out, anti-monopoly legislation os largely about preventing firms from abusing monopoly power to increase prices. If you consider the cost of using a social network to be the data the user provides, then the more data the user gives up to the use the social network, the higher the cost. Because of the strong network effect, users may have little choice but to stay on the platform if they wish to engage in the social network. The notion is that Facebook are abusing the stickiness of their social network by increasing monetisation of user data, knowing that users won’t easily leave.
By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.
Unfortunately this is a wildly speculative argument, which is unlikely to find favour with regulators in this case.
Even if it weren't speculative, how do you define the value of data? Is it by bits and bytes, or as the expected lift from incorporating it into a model? If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you.
> However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place.
This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost.
Additionally, if (hypothetically) one chooses to make advertising-supported websites illegal, then that leads to FB (and Google) shutting down, which I don't see as a net positive for the world. (Certainly most of their users wouldn't think so).
> By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.
So I don't agree with your argument about prices, so I'm not going to engage with it further (if you need to explain what a standard term means in the context of your argument, that's normally a warning sign).
However, IG had 20mn users when it got acquired. The consensus here was that it was a terrible idea and that FB would shut it down. We're now in a world where it has 1bn users and mints money for FB. Now, it definitely looks like FB acted badly.
But consider the alternative. FB are blocked from buying IG, so IG need to set up a sales team, an adevertising method and epxand globally. None of these things are cheap or trivial. There does exist a world where IG competes on a level-playing field independently, but I would argue that at least 80% of the time, this hypothetical leads to IG either under-performing or flaming out.
And to be fair, at the time of the IG purchase, the biggest threat to Facebook was mobile (once upon a time, FB had no ads on mobile).
Whatsapp again, should have been stopped by the EU, but there were little to no competition concerns raised within the US based on that acquisition, as nobody in the US used Whatsapp at the time.
I admit it is speculative but the argument encapsulates the abuse of the social network as I see it, which is why I'm running with it. It remains to be seen what angle the regulators will present when proving abuse of monopoly power.
However I cannot separate what Facebook is able to do on its social network without consequence from the idea that Facebook is an abusive monopoly.
> If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you.
Consider the "user price of improvement". Suppose that an initial model m1 only needs to regress on a users age, gender and location to guarantee a clickthrough rate of x%. As the social network grows and there are more users, a larger variety of adverts and longer engagements, all else fixed the clickthrough rate will go down if the users start seeing more irrelevant adverts (more ad bidders but same relatively static input features) as well as repeated adverts (longer engagement times but same input features).
In an effort to increase clickthrough rates either beyond x% or at least to maintain x% in a growing network, the model needs more express power. So m1 is expanded to m2 now using accumulated likes. Fine likes are activity which is generated on FB so that's fair game. But there's a small cost in user privacy: suddenly adverts can be targeted based on your likes.
The network grows and clickthrough rates must still be improved. m2 is expanded to m3 by incorporating activity with friends, including mutual likes. Again this is generated on the social network, but there is a privacy cost: adverts are served based on public and perhaps private interactions.
The network grows and clickthrough rates must still be improved. m3 is expanded to m4 using browser trackers, so now your activity outside of Facebook is used to serve adverts: the privacy cost is increased and suddenly becomes real. FB serves adverts to you based on anything you do on the internet.
<side note: I recently ordered widget A using my laptop browser and the next day I saw an advert on IG for widget A from a competitor on my mobile device. I don't have an FB account and I'm not logged into IG on my laptop browser. I have never seen adverts for widget A on IG until this moment>
Back to my argument. Now at this point FB has a strong social network based on your activity and your friends' activity as well as external network effects based on browsing trackers, log-in with FB identities, as well as your friends' external browsing activity.
The transition from m1 to m4 has required using more and more of your personal data (whether public or private) in order to maintain a clickthrough rate of x%.
> This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost.
Each time the model is improved by adding additional features, those features aren't acquired for free. They're acquired by deliberately mining users' personal information. You might not think this is the case, because data is data and data is stored in bits and bytes, but it has representational value that in many parts of the world (most notably the EU) is protected.
In other words, the change from m1 to m4 in order to serve adverts has incurred a cost in terms of the private data a user must give up in order to receive adverts that are relevant to them (ie maintain a clickthrough rate of x% or higher).
So yes in this sense it is a cost.
Furthermore, in the 21st century, data is a clearly a resource, and has monetary value. It can be mined and gathered from users, which is then used to generate revenue from advertising. Users are not compensated for their data but instead are provided with a free service. If the alternative was to pay for the service, what woul...
Both of these outcomes are speculative, but I'm not convinced about the 80% figure. I'm not sure that IG needed FB alone to get to a billion users. Many of those users aren't necessarily people and are companies, organizations and other entities which use IG for engagement. It's enough that people spend more time on IG than FB the app or website to convince those entities to engage on IG. Not sure what the proportions are exactly but just giving an example.
IG had less than 20mn users when acquired, literally nobody cared about it outside of the early-adopter crowd in SF. In general, value comes from execution rather than the idea, and I am definitely not convinced that IG would be anywhere near where it is today without Facebook, which leads me to believe that breaking it off at this point is pretty unfair.
Like, another way FB could have competed would have been to buy IG and let it die slowly. Given this anti-trust suit, that would appear to have been the smarter move, but it definitely wouldn't be overall better.
Lets also note that FB became popular not just because it was good, but because it was good and always stayed up, regardless of user growth. That has probably been one of the major engines for IG growth.
Finally, the success of IG was also driven by the use of free advertising on FB, without that it would have taken a lot longer (and cost a lot more money) for them to reach the scale that they have now.
Again, thanks for replying. I'm still not convinced by your model of the cost of IG/FB, but I appreciate that it's reasonably well thought out.
[1] https://www.reuters.com/article/us-facebook-instagram-idUSBR...
The lawsuit specifically cites Zuckerberg talking about acquisitions (in this case, the failed Twitter acquisition) as giving "extra time... to get our product in order without having to worry about a competitor growing".
Having an entry in Facebook’s users table is a long way from using Facebook for your social networking to the exclusion of competitors.
These don’t really compete with WhatsApp, which is cross platform, not tied to an employer, doesn’t require an invitation, subscription, friend network, setup to use, among other things.
Even in countries where iPhones are ubiquitous the cross-platform nature of Whatsapp and the fact that everyone from your friend to your grandmother is on it, makes it dominant.
Yes you could use Slack to message your friends like you would on Whatsapp. The experience won’t be the same, and setup will be a hurdle. But would you use Whatsapp to replace Slack at work?
I think the term “compete” is used very broadly here.
do you have data to back up that claim?
https://www.similarweb.com/corp/blog/mobile-messaging-app-ma...
And as an alternative source:
https://www.messengerpeople.com/global-messenger-usage-stati...
"4. iMessage
Communication apps like WhatsApp are available on practically all devices, whereas native apps like Apple’s iMessage (and now Apple Business Chat) are limited to one provider.
However, the user base for iPhone is constantly growing in the USA. A lot of adolescents prefer iMessage to apps like Snapchat in order to reach out to their friends.
Since iMessage is a pre-installed service of Apple, there are no official messaging usage statistics as they keep those “in-house”. Looking at the ever-growing demand and distribution of iOS devices though, we can assume that the pool of iMessage users is growing. In the fiscal year of 2017, Apple reached a quantity of 216.76 million iPhones."
iMessage no worky for groups because you'd be excluding the Android users. Group SMS... I don't think anyone over here is even aware that's an option. I only know about it from Americans on HN saying they use it.
See Skype, for example - the largest market penetration for a period of time and practically no one uses them any more. They were video-centric, yet the user base is already there for an extension into a primarily text medium. Not tied to an employer, doesn't require an invitation, subscription, friend network, setup to use, etc...
Whatsapp has other competitors currently. Telegram and Viber come readily to mind, and I am certain there are other services that I'm not aware of, the old fart that I am.
Whatsapp was incredibly popular in most of the underdeveloped world, where it became the de facto messaging app because of the low data requirements and ubiquitousness (and probable subsidies via the ISP provider). This was prior to FB buying them. Out of my group of contacts, the Telegram app notified me over the past year that roughly 2 dozen have signed up for it, e.g. That's another (albeit anecdotal) sign.
I understand the antagonism toward FB/Whatsapp/Instagram, given the consolidation of social networks within the purview of one entity, but not a single one of those services is a monopoly.
Could very well be I don't understand the intricacies of the law, and such consolidation is perhaps illegal for the betterment of society, but I'm not convinced that's the case still. Microsoft, for example, was accused of monopolistic behavior because they had enough power to pressure manufacturers to bundle IE with the OS. No such thing is happening in this situation. IANAL, but that's my simplistic take on it.
I stand to be corrected.
Hindsight is 20/20 but at the time of acquisition it was far from a sure thing and it's safe to say that without Facebook resources Instagram would not be what it is today.
So yeah, there's really no "competition". Either you have whatsapp or you don't talk to people.
And it's highly used for cross-business communication in Europe, I can tell you that.
Either you use WhatsApp or you don't talk to people.
And I'm not saying this is a bad thing, really.. I think "monopolies" have their place in standardizing things that we do and it makes it convenient.
(Side note: if fucking Apple would open up iMessage on android/windows they would OWN the chat market in a matter of minutes in the US)
But there does get to a point where you cannot say "people use it because they like it". Most people use it solely because everyone else uses it.
Just like Facebook. There is no "alternative" for real-life profile social media. If you want to use that type of social media, Facebook is the only thing whether you like it or not.
Facebook started off in a market with Orkut, Myspace, Friendster and along came Path, Twitter, Google+. Facebook had network effects and people gravitated towards it.
So this is basically saying network effect is bad. You cant get too popular.
Which would mean that the lawsuit would fail. pretty much everything that happens outside of the USA is irrelevant for this lawsuit.
It's not actually illegal to be a monopoly but to illegally abuse your market position leading to anti-competitive behavior.
Unfortunately, it's never enforce properly as the FTC doesn't have any teeth.
I think the only way we're going to solve this is to actually TAX these companies appropriately. This is one of the major reasons they metastasize.
I’m still confused as to which “market” is harmed: advertisers? Facebook users? other social networks?
If the market is Facebook users, what’s the precedent in asserting this level of harm to a market that consists substantially of non-paying users of an inessential service?
Several people will say, "try not having a Facebook account and participating in X," where X is some mandatory part of your life, such as your children's schooling, keeping up with relatives, job-related stuff, social clubs or organizations, etc. It might not be impossible, but it's an undue burden in some cases.
It's impossible to keep up with college affairs without Facebook, as a Facebook group is the primary method of communication and organization.
It was even worse before the pandemic, since there were no MS Teams or Google Classrooms for each subject. If an assignment was released, it was the representative's Job to male sure it reaches everyone. Guess what did they use?
Oh the assignment is delayed? TA announces on Facebook group. Midterms Time table? College Facebook page. All college-wide announcements were made through its Facebook page.
Facebook is practically essential for college life. You could say it's the College's fault, but that's not our discussion. What's important is that I can't delete my Facebook without causing a lot of pain in the ass for myself.
Even with scare quotes it's not a multiple: the social network of Facebook users is an advertising market. You don't have to be a snot-nosed growth hacker to see that FB has a monopoly position in advertising.
Here's a test: does FB have any reason to care about the quality of whatever is being advertised in any one ad? Where are you going to advertise if FB keeps putting your ads for your doctor's office next to ones for a child-rape rock opera and/or "COVID-19 is a hoax" seminars? What is your recourse, switching your advertising to Parler and LinkedIn? NYTimes dot com? The 72 next most popular social networking sites around the world? Surely VKontakte runs a clean house.
Again, look at railroads. In the Trust era, trains were not the product, were not the market. Transportation was.
Here's a nice little rundown: https://twitter.com/jason_kint/status/1336813617736507397
We had a few decades of true antitrust, but the efforts to undermine it were successful. Check out Goliath by Matt Stoller for a decent history.
The allegation here is anti-competitive behavior. There are plenty of things you an do that are anti-competitive and illegal without actually achieving a monopoly. The classic example is price fixing but there are many others.
Unsurprisingly, the actual linked article in this thread spells out these allegations of anti-competitive actions on Facebook's part.
Twitter, TikTok, and HN all thrive on strangers communicating with each other.
It's the fact that Facebook is "Facebook" that is the problem. That you can't imagine Facebook's equal being viable in any way, other than to mention the wagons and horses of the internet. This is not to comment on a level of sophistication, but features. What can you sell on TikTok through TikTok? It's a category error to equate them with FB. Facebook has cultivated this state of affairs, and they have gone out of their way to interfere with the success of companies it views as competition.[2]
This is even before we get to the use of Facebook to create negative externalities, for which it provides powerful tools. On purpose.
1. https://en.wikipedia.org/wiki/Sherman_Antitrust_Act_of_1890#...
2. https://techcrunch.com/2020/07/29/in-antitrust-hearing-zucke...
I have no knowledge in this area, so just throwing it out there for more informed minds to fill in the blanks.
> illegally maintaining its personal social networking monopoly
"Monopoly" is a term that's fairly overloaded/misunderstood; while in economics refers specifically to a situation where there is a single supplier for a good/service (https://en.wikipedia.org/wiki/Monopoly#Market_structures), in the legal definition "monopoly power" is defined much more loosely, as "the power to control prices or exclude competition" in the US (e.g. https://www.justice.gov/atr/competition-and-monopoly-single-...), and there are complex tests for monopoly power in the EU including >50% market share which I'm less familiar with.
I think common discourse tends to interpret monopoly in the economics sense, which leads to confusion when we look at antitrust enforcement like this. Not to mention that under antitrust laws you don't even need to have (loosely defined) "monopoly power" to be engaging in illegal anticompetitive behaviors.
Specifically analyzing those competitors:
LinkedIn is a business social network, not a personal social network as they define it. Forums are not "social networks" as commonly defined (graph of relationships).
Twitter is a competitor, but they have far less market share, e.g. see https://www.t4.ai/industry/social-media-market-share#:~:text... which puts Facebook at 69% of social media users, (a monopoly in most definitions), while twitter is at ~8%. Somewhat confounding because users can be on both, but the magnitudes are what's important.
TikTok is a valid competitor too, but again they don't have nearly as dominant a position as Facebook <25% of FB's MAU according to https://datareportal.com/social-media-users?rq=tiktok.
I think Ben Thompson has the best analysis of antitrust as it pertains to Facebook, as he deeply understands the market dynamics that give Facebook and other large tech companies their market power, e.g. see https://stratechery.com/2017/manifestos-and-monopolies/.
"Social advertising".
https://twitter.com/CaseyNewton/status/1336762362821443585
On one hand, forcing Facebook to open up its social graph would have serious privacy implications.
On the other, it would provide an incredible boost to any new social network, which could quickly bootstrap off your existing friends. That's what Instagram did with Twitter and what Vine did with Facebook.
The most important feature of a social network has always been whether your friends/family use it. If any new social network can take advantage of Facebook's social graph via API, that neutralizes this advantage. Now Facebook is forced to compete by being a better social network, not just a bigger one.
There shouldn't be much additional privacy concern with a Facebook user saying "I trust user Alice and service example.com, so please send all my posts to alice@example.com using ActivityPub."
Similarly, Alice should be able to tell example.com that she trusts the Facebook user Bob with ID 123456789, so that example.com sends her posts to Facebook addressed to Bob (perhaps authenticated with a pre-shared key that Bob emailed her).
Once users are free to move between providers, those providers can compete based on their level of privacy and security, which right now Facebook has little incentive to improve.
I suppose that a lot of personal data could be gleaned about someone (and their friends) from a rogue ActivityPub node reading the posts that were federated with it, but people would be suspicious if, for example, Mastodon suddenly started asking users for their phone number, Social Security number, and a picture of their driver's license.[1] And people would be very unlikely to sign up to a node which was actually run by Cambridge Analytica, right?[2]
[0] https://www.theguardian.com/news/2018/may/06/cambridge-analy...
[1] https://www.washingtonexaminer.com/opinion/parler-is-not-the...
[2] https://www.techdirt.com/articles/20201116/01141545710/what-...
So, it's worth considering that people might indeed happily sign up for a rogue node that steals their info without knowing what's going on.
* other companies/entities that can be considered "competitors" (Twitter, TikTok, LinkedIn, etc)
* the acquisitions in question (Instagram and WhatsApp) being approved by the suing entity (namely, the FTC) themselves back in the day
I wouldn't be surprised if an outcome of this were to be say, limits against cross-linking acquisitions together or the like in the future. However, having existing companies be forced to be spun out in their entirely... I have a hard time imagining that being the outcome, given the chilling effect it could have on the rest of the industry.
What would be the precedent if regulatory approvals could be challenged with a change in administration?
That's like someone is approved for a license to own a gun, then that person uses the gun to commit a crime, and then their license is revoked. Then someone points the finger at whoever it was that approved that person for a gun license.
What would be the precedent if a merger approval gave you a free pass to be anti-competitive?
I could see eyebrows being raised around interop work, but I'm not sure about the rest.
What's hilarious is that breakups and divestiture were considered a completely commonplace occurrence up until a generation ago. It was just a matter of course for the FTC and DOJ to deal with companies that had gotten too big or were engaging in questionable behavior and forcing them to break up into pieces.
This, of course, was generally a good thing. Then we just sort of stopped. Now we're at a point where your point of view, which is that this is "hard to imagine" is a completely reasonable one.
It shouldn't be though. The current situation of consolidation at the top of our economy is wildly unstable and harmful to workers, consumers, and fledgeling entrepreneurs alike, and we should never have let it get this out of control.
My pet theory is that the legislature is so divided and incompetent that laws are horribly outdated. The other two branches of government need to compensate. Google v. Oracle is another example of this.
Does that prevent Congress from passing laws criminalizing ongoing behavior by corporations, or just from prosecuting acts from before the law was passed?
We need transparency, not this.
How is there not some sort of regulation to allow me to opt-out or configure these algorithms that target me for ads of curated content?
It's my f*cking data!
(This comment has nothing to do with Whatsapp and Instagram, just Facebook web)
Replicating and building out an ad platform like FBs from zero would be very very hard. None of the other social platforms ad networks are even close in quality but especially interface/targeting/features. Snap / TW I would say are at maybe 5% if I had to pick a number...
Especially especially taking into account integration with FB pixel.
Facebook has been trying to make it appear that integration will make separation impossible.
But the reality is, you simply duplicate the databases and whatever shared services they depend on, and create a "stub" FB backend for IG, and a "stub" IG backend for FB for the shared services to work... and they go on their merry independent ways, while engineers remove things that depend on the stubs at their leisure.
Obviously it's not trivial (and involves the inherent complexities of any datacenter migration), and doing it without downtime is a whole separate beast, but it's not impossible or so wildly difficult it can't be carried out. In other words, there's zero reason it should be a factor in the legal outcome.
At most, there would be an IP issue -- e.g. would the spun-out IG be permitted to have a stubbed FB backend, and vice-versa -- but that's easily solved by providing those permissions as part of the separation agreement, with a timeline to remove them (e.g. 2 years).
Even Bill Gates has cleaned up his reputation, let alone engineers who worked at MS in monopoly days. I don't think anyone that was there at the time is worried about how it reflects on them personally.
It's amazing what a few billion dollars of charitable donations can buy you. This is called "fumigating your fortune".
I'm skeptical there'd be any hard feelings from other global corporations, arguably doing the same thing
> The complaint also alleges that Facebook, over many years, has imposed anticompetitive conditions on third-party software developers’ access to valuable interconnections to its platform, such as the application programming interfaces (“APIs”) that allow the developers’ apps to interface with Facebook. In particular, Facebook allegedly has made key APIs available to third-party applications only on the condition that they refrain from developing competing functionalities, and from connecting with or promoting other social networking services.
> The complaint alleges that Facebook has enforced these policies by cutting off API access to blunt perceived competitive threats from rival personal social networking services, mobile messaging apps, and other apps with social functionalities. For example, in 2013, Twitter launched the app Vine, which allowed users to shoot and share short video segments. In response, according to the complaint, Facebook shut down the API that would have allowed Vine to access friends via Facebook.
Making API's available "only on the condition that [developers] refrain from developing competing functionalities" is one thing; and I can see how that seems anticompetitive, I dont' know enough about the law to say when anticompetitive is illegal.
But that second one is more interesting. "shut down the API that would have allowed Vine to access friends via Facebook" -- they didn't just not have Vine have access to it, they removed it, and that is being complained about. The implication to me seems to be that facebook must provide certain API's to avoid anticompetitive behavior?
The API I personally most miss and am interested in is Events. My interest is definitely in reducing facebook's lock on users. A lot of people I know find missing out on events the hardest reason to leave facebook, and if an API was available show Facebook events on other platforms, it would definitely aid people in leaving Facebook, which is I presume exactly why Facebook got rid of the API, which sounds pretty similar to the Vine complaint, although I don't know whether there was a specific facebook competitor threatening them with events integration. I would be thrilled if the FTC made Facebook restore an Events API, hopefully in a way that was sufficiently full-featured for the kinds of integrations that would help people get off facebook. ("Help people get off", it sounds like an addiction, yup).
But FB has consistently introduced open APIs and features, let them gain traction, then shut them down and replicated the most popular features.
I have been burned multiple times. Most recently new restrictions on Messaging.
If FB was mandated to restore some APIs possible make new ones for interoperability (while keeping the privacy changes over the years) that would be super super valuable to help other companies make value without trying some fruitless and probably not sound breakup.