Facebook Antitrust Lawsuit - What is your intake?

[Mart1al]

Hello, everyone. I just woke up to the news of Facebook getting sued for being a social media monopoly and tried to look for a post here at the forum but couldn't find one. So, I started one to see what everyone here thinks about what is going on.

According to the NY Times:
"...The Federal Trade Commission and more than 40 states accused Facebook on Wednesday of buying up its rivals to illegally squash competition, and they called for the deals to be unwound, escalating regulators’ battle against the biggest tech companies in a way that could remake the social media industry."

and also
"Facebook, the prosecutors said Wednesday, should break off Instagram and WhatsApp, and they said new restrictions should apply to the company on future deals. Those are some of the most severe penalties regulators can demand. Facebook said it planned to vigorously defend itself against the accusations."

I believe this is an interesting topic since I believe that monopolies kill entrepreneurship and hurt the economy (without mentioning other non-economical factors) but I also see that they themselves bought Instagram and WhatsApp for billions of dollars - with the approval of the same institution that is now suing them - and heavily invested on them so they could become the tools that we know of today.

I myself am not a huge fan of social media, so I couldn't care less for the implications on the social media world, but I believe this has a major influence on our lives as entrepreneurs trying to Kill Bigger (as our fellow forum member Kak says) as this will set precedences for how big companies - especially tech companies - have to act in society.

What are your thoughts on it?

Some resources if you'd like:

CNN - Facebook must be broken up, the US government says in a groundbreaking lawsuit

The Washington Post - U.S., states sue Facebook as an illegal monopoly, setting stage for potential breakup

NY Times - U.S. and States Say Facebook Illegally Crushed Competition

The Guardian - Facebook's 'monopoly' must be split up, US and states say in major lawsuits

 

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[Fox]

A little too little too late there I think.

If someone stays in maybe this sticks.

If someone else gets in I don’t see this going anywhere.

Facebook is a pretty much a political tool at this point so I’d imagine if stays/goes will depend mostly on that.

 

[StrikingViper69]

Another nail in the coffin for freedom.

This lawsuit amounts to "We want you to be successful... but not too successful...". It's saying the government has a right to interfere with companies.

 

[Fox]

Another nail in the coffin for freedom.

This lawsuit amounts to "We want you to be successful... but not too successful...". It's saying the government has a right to interfere with companies.

I think it’s fair game.

Facebook has been happy to interfere with Governments. Don’t dish it out if you can’t take it.

They deserved to be regulated once they clearly crossed from “share some photos with your buddies” to “this is how you should run your country”.

I don’t see this sticking though with them donating 400 million into politics recently.

 

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[Onakosa]

Another nail in the coffin for freedom.

This lawsuit amounts to "We want you to be successful... but not too successful...". It's saying the government has a right to interfere with companies.

Some might say the govt has a duty to 'interfere' - or 'regulate' as we might call it - companies. You don't think so?

 

[StrikingViper69]

Some might say the govt has a duty to 'interfere' - or 'regulate' as we might call it - companies. You don't think so?

Some people say a lot of things. The government should only intervene if objective laws are being broken, fraud, theft, slander, etc. And even then... I can't see any justification for breaking a company up.

 

[Mart1al]

Some people say a lot of things. The government should only intervene if objective laws are being broken, fraud, theft, slander, etc. And even then... I can't see any justification for breaking a company up.

What about the cases where companies have government-like levels of power, such as the Korean Chaebols?

They are massive conglomerates controlled by South Korean families that exert significant power over the population. If I recall correctly, there is even an entire city controlled by a single company because every single resident there works for said company.

The South Korean government is in a tricky situation because if one of those companies fail, the country will take a big hit, making it extremely complicated to deal with them in case somethings goes awry. (Nice reference video for this)

I believe that left alone, companies will not strive for "fair-competition", as one competitor can easily destroy competition within their market by using questionable actions. I mean, why should they not?

Not that every entrepreneur or business owner is like that, but there are many who - like those in South Korea - that take every single possible action within their power to move ahead of their competitors. Legal or not.

The underlying question here is: Where do we draw the line? Who should decide and enforce the line?

As an example, I am worried companies like Amazon and Google will become too big to fail or to be held accountable for their actions.

 

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[Onakosa]

Some people say a lot of things. The government should only intervene if objective laws are being broken, fraud, theft, slander, etc. And even then... I can't see any justification for breaking a company up.

Companies can't just be allowed to become monopolies, create cartels etc. It's not good for democracy and surely it goes against the principles of the free market? If there's only one choice of provider because the big guns squeezed the others out, what sort of market is that?

Facebook stopped being a friendly little website where you poked people with pictures of cats and sandwiches about 12 years ago. It's an unelected unaccountable and out of control monster that manipulates democratic elections (allegedly) and harvests private data for whatever purposes (nobody really knows for sure). The 'unacceptable face of capitalism' to coin a phrase.

 

[Deleted50669]

I think it’s fair game.

Facebook has been happy to interfere with Governments. Don’t dish it out if you can’t take it.

They deserved to be regulated once they clearly crossed from “share some photos with your buddies” to “this is how you should run your country”.

I don’t see this sticking though with them donating 400 million into politics recently.

I agree. There is a point at which a company gets big enough that it oversteps its bounds. Operating outside of a capital market, in my opinion, is a strong example of that. A company that large has a duty at the level of leadership to preserve the boundary between market involvement and societal involvement. Whoever is running the show at Facebook hasn't drawn that line at all.

In my opinion Amazon is a worse offender than Facebook, but Amazon's business model isn't as blatantly corrupt as Facebook's from the perspective of a government prosecutor. That being said, Amazon is far more anti-competitive than Facebook, which is the biggest reason anti-trust laws exist.

 

[StrikingViper69]

Companies can't just be allowed to become monopolies, create cartels etc. It's not good for democracy and surely it goes against the principles of the free market? If there's only one choice of provider because the big guns squeezed the others out, what sort of market is that?

Facebook stopped being a friendly little website where you poked people with pictures of cats and sandwiches about 12 years ago. It's an unelected unaccountable and out of control monster that manipulates democratic elections (allegedly) and harvests private data for whatever purposes (nobody really knows for sure). The 'unacceptable face of capitalism' to coin a phrase.

"It's not good for democracy". What does that mean? Bear in mind that "democracy" is a whimsical standard that means whatever the crowd wants it to mean at any point in time. What's good for democracy would involve executing landlords and anyone with more than £300 in their bank account (if you listen to Twitter )

Monopolies can work in the following ways:

Monopoly By Merit
This is what Facebook and Google did. They created a product vastly superior to every other offering on the market, to the extent where they became the only player in the market. Yes they "squeezed" out the others... because no-one wants to use them. But feel free to go use AskJeeves and MySpace if you want to

Maybe some people chose to sell possible competing products to these companies... well that's their choice. Free markets mean the people that create things own their work and what they do with it.

I'd also include mergers in this category. For example, the merging of steel industry in America in the early 1900s by Carnegie.

Now I know your next question:

"What if a monopoly becomes the only supplier of something and then increases prices to create high profit margins?"
Well.. they make more money... and also attract competitors.

If they have a high profit margin on something that only they can create, from some innovation, then that's great. When this is the case, people usually complain out of envy more than any serious moral concern. If the prices really were "too high" the company would go out of business.

If they are charging crazy prices on some commodity, then competitors will enter the field and prices will come down.

The only time this situation becomes unfair is when government steps in to protect the market, which brings us to:

Monopoly By Force / Regulation
The only other type of monopoly is when Government either creates a state owned monopoly that we are not legally allowed to compete with, or it's impossible to compete with (because the government makes the rules / has taxpayer money / money printing); or government creates regulation making entry into the market almost impossible.

Does Facebook Manipulate Democratic Elections?
Only to the same extent that the media do. The people that own Facebook can do what they want with it. My one caveat would be if they are going to shadow ban (or whatever) a particular political view, it would be nice to be told. But then again... I can't think of any media outlet that gives a list of their political bias.

 

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[Silverfox148]

Facebook is an unaccountable political and social media mega control center at this point for the few that truly control Facebook, it was only a matter of time before the politicians from all sides of the aisle began to crack down on it.

This move from the states/government is not because of a "protect democracy, regulation, etc" desire but rather from the realization from all levels of government that Facebook in it's current form may be a threat to their current existing power in the future.

This is power play by the government not to protect consumers but rather to protect themselves against the platform being used against them in the future.

 

[DiamondDog]

It won't succeed.

Social media platforms aren't all the same. WhatsApp doesn't occupy the same market as Instagram for instance. And ultimately they are advertising platforms. There's plenty of competition for Facebook in the advertising space.

The FTC will first have to prove that Facebook holds a dominant position in the market (having most of the market share), which I doubt is the case but that requires a complex economic and legal assessment. They also have to prove that users and costumers have no alternatives to Facebook and its companies which simply isn't true AND that users are being harmed by Facebook's anticompetitive conduct.

Similarly, they'll have to determine whether Facebook actually commits anticompetitive and predatory practices.

The guys at the FTC just want to feel important F*cking with Facebook. Zuckerberg's legal team is going to crush them.

 

[sfarieri]

Hello, everyone. I just woke up to the news of Facebook getting sued for being a social media monopoly and tried to look for a post here at the forum but couldn't find one. So, I started one to see what everyone here thinks about what is going on.

According to the NY Times:
"...The Federal Trade Commission and more than 40 states accused Facebook on Wednesday of buying up its rivals to illegally squash competition, and they called for the deals to be unwound, escalating regulators’ battle against the biggest tech companies in a way that could remake the social media industry."

and also
"Facebook, the prosecutors said Wednesday, should break off Instagram and WhatsApp, and they said new restrictions should apply to the company on future deals. Those are some of the most severe penalties regulators can demand. Facebook said it planned to vigorously defend itself against the accusations."

I believe this is an interesting topic since I believe that monopolies kill entrepreneurship and hurt the economy (without mentioning other non-economical factors) but I also see that they themselves bought Instagram and WhatsApp for billions of dollars - with the approval of the same institution that is now suing them - and heavily invested on them so they could become the tools that we know of today.

I myself am not a huge fan of social media, so I couldn't care less for the implications on the social media world, but I believe this has a major influence on our lives as entrepreneurs trying to Kill Bigger (as our fellow forum member Kak says) as this will set precedences for how big companies - especially tech companies - have to act in society.

What are your thoughts on it?

Some resources if you'd like:

CNN - Facebook must be broken up, the US government says in a groundbreaking lawsuit

The Washington Post - U.S., states sue Facebook as an illegal monopoly, setting stage for potential breakup

NY Times - U.S. and States Say Facebook Illegally Crushed Competition

The Guardian - Facebook's 'monopoly' must be split up, US and states say in major lawsuits

Facebook is massive. I don't think anything will happen where they'd be forced to sell off Instagram etc but we shall see. It's not like they own Twitter and TikTok either.

 

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[Deleted50669]

WSJ News Exclusive | Google, Facebook Agreed to Team Up Against Possible Antitrust Action, Draft Lawsuit Says

Facebook and Google agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week.

www.wsj.com

 

[Tourmaline]

Another nail in the coffin for freedom.

This lawsuit amounts to "We want you to be successful... but not too successful...". It's saying the government has a right to interfere with companies.

Yup. Socialism Type 2, or an aspect of Fascism, being played out.

I think it’s fair game.

Facebook has been happy to interfere with Governments. Don’t dish it out if you can’t take it.

They deserved to be regulated once they clearly crossed from “share some photos with your buddies” to “this is how you should run your country”.

I don’t see this sticking though with them donating 400 million into politics recently.

Are you referring to censoring of political people or something more?

Still I'm not sure if doing something not illegal warrants the government cracking down with its use of force.

WSJ News Exclusive | Google, Facebook Agreed to Team Up Against Possible Antitrust Action, Draft Lawsuit Says

Facebook and Google agreed to “cooperate and assist one another” if they ever faced an investigation into their pact to work together in online advertising, according to an unredacted version of a lawsuit filed by 10 states against Google last week.

www.wsj.com

hahaha I can only imagine the monster.

You think Alphabet or Facebook are bad?

Wait till you see Alphabet-Facebook.

 

[Xeon]

I hope Instagram gets sold to some other company. Or best still, ByteDance coming up with an app that resembles 2014 version of Instagram.

 

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[Kassadi]

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