{"id":38501,"date":"2021-11-03T12:00:38","date_gmt":"2021-11-03T16:00:38","guid":{"rendered":"https:\/\/www.iposgoode.ca\/?p=38501"},"modified":"2021-11-03T12:00:38","modified_gmt":"2021-11-03T16:00:38","slug":"facebook-fights-back-against-the-ftc-claiming-it-is-not-a-monopoly","status":"publish","type":"post","link":"https:\/\/www.yorku.ca\/osgoode\/iposgoode\/2021\/11\/03\/facebook-fights-back-against-the-ftc-claiming-it-is-not-a-monopoly\/","title":{"rendered":"Facebook fights back against the FTC, claiming it is not a monopoly"},"content":{"rendered":"\n
\"Blue

Photo by Brett Jordan (Pexels<\/a>)<\/p><\/div>\n

\"Meena<\/p>\n

Meena Alnajar is an\u00a0<\/span>IPilogue<\/span>\u00a0Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School<\/span><\/span><\/em>\u00a0<\/span><\/p>\n

\u00a0<\/p>\n

On October 4, 2021,\u00a0it was publicized that Facebook Inc.\u00a0<\/span>asked a judge to dismiss<\/span><\/a>\u00a0the U.S Federal Trade Commission\u2019s (FTC) antitrust case that aims to force Facebook\u00a0to\u00a0sell Instagram and\u00a0WhatsApp. The FTC initially filed a complaint that\u00a0<\/span>Facebook had a monopoly<\/span><\/a>\u00a0and\u00a0requested the sale of Instagram and\u00a0WhatsApp\u00a0to prevent a monopoly over the social media market. Does Facebook\u00a0have a monopoly over the market?\u00a0Or\u00a0simply\u00a0a strong foothold?\u00a0<\/span>\u00a0<\/span><\/p>\n

What is Antitrust<\/span><\/b>\u00a0<\/span><\/p>\n

The FTC\u2019s Bureau of Competition enforces antitrust laws. These laws\u00a0<\/span>promote competition and protect consumers from anticompetitive mergers<\/span><\/a>. The market is said to be \u2018free\u2019 and active when there is aggressive competition. This competition is productive for society because it gives\u00a0<\/span>consumers benefits\u00a0<\/span><\/a>such as lower prices, higher quality products and services,\u00a0and\u00a0greater\u00a0innovation.<\/span>\u00a0<\/span><\/p>\n

Antitrust laws try to\u00a0<\/span>restrain improper monopolies<\/span><\/a>\u00a0which are those monopolies obtained, preserved,\u00a0or attempted by a firm that tried to destroy its competitors on purpose. Under\u00a0<\/span>section 2 of the\u00a0<\/span>Sherman Act<\/span><\/i><\/a>, attempted monopolization is an antitrust offence if it meets certain criteria. The defendant must have employed\u00a0<\/span>anticompetitive practices with a specific intent<\/span><\/a>\u00a0to obtain a monopoly in a defined relevant market. Second, there may be a dangerous probability that a\u00a0defendant will succeed in obtaining a monopoly unless\u00a0<\/span>there is antitrust intervention<\/span><\/a>. While the FTC may appear to be blocking Facebook\u2019s ability to maximize wealth by acquiring Instagram and\u00a0WhatsApp, this FTC case may be trying to preserve the competition and economic activity in the social media marketplace. In this particular case, the\u00a0<\/span>FTC must define the market<\/span><\/a>\u00a0and that Facebook controls 60% of the relevant market.\u00a0<\/span>\u00a0<\/span><\/p>\n

Antitrust and Monopolies in the Tech Sphere<\/span><\/b>\u00a0<\/span><\/p>\n

Social media may be a broad, general marketplace and thus fail\u00a0to meet\u00a0one of the criteria under Section 2. Most social networks exist\u00a0in a niche, trying to\u00a0<\/span>provide some sort of unique service<\/span><\/a>\u00a0like Facebook once did, connecting people from around the world and writing on each other\u2019s walls. This unique niche can then become a market on its own, but how exactly are these unique markets dominated by one defendant? Current suggestions focus on\u00a0<\/span>advertising revenue<\/span><\/a>\u00a0in which case\u00a0<\/span>Facebook does hold the majority<\/span><\/a>\u00a0over\u00a0WhatsApp\u00a0and Instagram. However, antitrust cases are few in high-tech industries, so FTC\u2019s current complaint is difficult to compare in outcome due to limited jurisprudence.\u00a0<\/span>\u00a0<\/span><\/p>\n

Facebook\u2019s rebuttal\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

Facebook has requested the FTC\u2019s case be\u00a0<\/span>dismissed with prejudice<\/span><\/a>. Facebook argues that the\u00a0<\/span>FTC allowed the social network\u2019s mergers<\/span><\/a>\u00a0with Instagram and\u00a0WhatsApp\u00a0which may demonstrate a limited factual basis that Facebook\u00a0<\/span>engaged in an unlawful monopoly\u00a0<\/span><\/a>since it acted with FTC\u2019s approval. Further, social media is a rapidly changing market and Facebook still has<\/span>\u00a0rapidly growing competitors<\/span><\/a>\u00a0including\u00a0TikTok, Twitter,\u00a0and\u00a0Google.<\/span>\u00a0<\/span><\/p>\n

Conclusion\u00a0<\/span><\/b>\u00a0<\/span><\/p>\n

People experienced the primary issue with Facebook\u2019s mergers firsthand with the\u00a0<\/span>Facebook, WhatsApp, and Instagram<\/span><\/a>\u00a0outage on October 4, 2021. When a monopoly emerges, consumers have less choice and lose out on earnings. Consider the lost advertising revenue with influencers and companies unable to post on\u00a0Instagram, or\u00a0concerned loved ones who rely on\u00a0WhatsApp\u00a0to communicate. Perhaps if the app trifecta was separated, the outage would not have affected us at all. However, Facebook is a corporation,\u00a0and\u00a0corporations aim to maximize wealth.\u00a0The FTC once agreed with this when\u00a0<\/span>it approved<\/span><\/a>\u00a0Facebook\u2019s purchases of\u00a0<\/span>Instagram and WhatsApp<\/span><\/a>\u00a0in the first place. It may be hard for the FTC to go back on their word and undo these\u00a0<\/span>billion<\/span><\/a>-dollar deals.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":2140,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","footnotes":""},"categories":[3,1031],"tags":[1962,443,34,1286,436,2601],"class_list":["post-38501","post","type-post","status-publish","format-standard","hentry","category-blogs","category-social-media","tag-antitrust","tag-facebook","tag-meena-alnajar","tag-social-media","tag-technology","tag-whatsapp"],"yoast_head":"\nFacebook fights back against the FTC, claiming it is not a monopoly - IPOsgoode<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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