. Right? Mark Zuckerberg appeared on national TV to dismantle Facebook’s monopoly. To the average person, Facebook’s monopoly seems obvious. “After all,” as James E. Boasberg of the U.S. District Court for the District of Columbia put it in his recent decision, “No one who hears the title of the 2010 film ‘The it is. About.” But obviousness is not an antitrust standard. Monopoly has a clear legal meaning, and thus far, Lina Khan’s FTC has failed to meet it.
Today’s refiling is much more substantive than the FTC’s first foray. But it’s still lacking some critical arguments. Here are some ideas from the front lines. First, the FTC must define the market correctly: personal social networking, which watch the ads before videos or in between posts if the user-generated content were not there. Facebook has harmed consumers by suppressing creator wages.. Second, the FTC must establish that Facebook controls over 60% of the market — the correct metric to develop this is revenue. Though consumer harm is a well-known test of monopoly determination, our courts do not require the FTC to prove that Facebook harms consumers to win the case. As an alternative pleading, the government can present a compelling case that Facebook harms consumers by suppressing wages in the . If the creator economy is accurate, then the value of ads on Facebook’s services is generated through the fruits of creators’ labor; no one would
According to the court, the FTC must meet a two-part test: First, the FTC must define the market in which Facebook has market share analysis is unequivocally revenue — daily active users (DAU) x average revenue per user (ARPU). And Facebook controls over 90%., established by the D.C. Circuit in Neumann v. Reinforced Earth Co. (1986). This is the market for personal social networking services, which includes messaging. Second, the FTC must establish that Facebook controls a , which courts have defined as 60% or above, selected by the 3rd U.S. of Appeals in FTC v. AbbVie (2020). The right metric for this
The answer to the FTC’s problem isSnapchat’s investor presentations: Snapchat’s stories? Twitter and Snapchat are competitors to Facebook. Facebook has ruthlessly copied featuresThe most recent example is its most successful from its inception. is the most recent example.
Messaging must be included to demonstrate Facebook’s breadth and voracious appetite to copy and destroy. Facebook’s range of social media services is remarkable. WhatsApp and Messenger have over 2, respectively. Given the ease of feature copying, a messaging service of WhatsApp’s scale could become a full-scale social network in months. This is precisely why Facebook acquired the company. But the FTC needs to understand that messaging is a part of the market. And this acknowledgment would not hurt their case.
The metrics: Revenue shows Facebook’s monopoly
Boasberg believes revenue is not an apt metric to calculate personal networking: “The overall revenues earned by PSN services cannot be the right metric for measuring market share here, as those revenues are all earned in a separate market — viz., the advertising market.” He is a confusingwith the market. Not all advertising is cut from the same cloth. In today’s refiling, the FTC correctly identifies “social advertising” as distinct from “display advertising.”
But it goes off the deep end, trying to avoid naming revenue as the specificmetric. Instead, the FTC cites “time spent, daily active users (DAU), and users (MAU).” In a world where Facebook Blue and Instagram compete only with Snapchat, these metrics might bring Facebook Blue and Instagram combined over the 60% monopoly hurdle. However, the FTC does not make a sufficiently convincing market definition argument to justify the choice of these metrics. Facebook should be compared to other personal social and their correct inclusion in the market would undermine the FTC’s choice of time spent or DAU/MAU.
Ultimately, cash is king. Revenue is what counts and what the FTC should emphasize. As Snapchat shows above, payment in the personal social media industry is calculated by ARPU x DAU. The individual market differs from the entertainment social media market (where Facebook competes with YouTube, TikTok, and Pinterest). And this, too, is different advertising market (Google). Not all advertising-based consumer technology is built the same. Again, advertising is a business model, not a market.
For example, in the, Netflix’s subscription revenue competes in the same market as CBS’s advertising model. But their market share remains a pittance compared to Facebook. News Corp.’s acquisition of Facebook’s early competitor, MySpace, spoke volumes about the internet’s potential to disrupt and destroy traditional media advertising markets. Snapchat has chosen to pursue advertising, but incipient competitors like Discord are successfully growing using subscriptions.