Recently, Facebook has stepped up to challenge the FTC’s antitrust case against its playbook that questions the agency. This is an arguably expansive approach to define monopolies.
However, the company has used the old reliable statement saying that “we’re not a monopoly because we never raised prices” and “how can it be anti-competitive if we never allowed competition”.
Today, in a filed document, Facebook has laid out its case by saying “By a one-vote margin, in the fraught environment of relentless criticism of Facebook for matters entirely unrelated to antitrust concerns, the agency decided to bring a case against Facebook that ignores its own prior decisions, controlling precedent, and the limits of its statutory authority.”
Yes, Facebook is the victim here. But after the reluctant explanation that the FTC doesn’t know its own business. The company argues that the suit against Facebook should be spiked because it fails along three lines by the judge.
FTC is seeking to break up Facebook by alleging illegal monopolies. First, the FTC does not “allege a plausible relevant market” as it’s important to have a controlled market for a monopoly.
Facebook also argues that the FTC has not shown this and they are alleging only “personal social networking” and “no court has ever held that such a free goods market exists for antitrust purposes.”
The implication is not FTC failing to define the social media market, but a market may be non-existential because social media is free.
The tech has argued that “because we do not fall under any of the existing categories, we are effectively unregulated.” After all the system is incapable of regulating social media companies by its advertising practices.
The second argument, FTC says is they “cannot establish that Facebook has increased prices or restricted output because the agency acknowledges that Facebook’s products are offered for free and in unlimited quantities.”
Here, the idea is that if a product is free, it is by definition not possible for the provider to have a monopoly.
The third argument by FTC is the purchase of up-and-coming competitors for enormous sums in the buds restricts access to Facebook’s platform and data. These are not only perfectly legal but that the agency has no standing to challenge them.
Of course, the FTC revisits acquisitions and there’s precedent for unraveling them. For instance, to gain new information which was not available during the review process.
“Facebook acquired a small photo-sharing service in 2012, Instagram … after that acquisition was reviewed and cleared by the FTC in a unanimous 5-0 vote,” reads the document.
Leaks and disclosures of internal conversations with respective acquisition have left the cast it in a new light. Hence, Facebook has become far less secure than today. The company was scared that Instagram might eat away its customers, so it was better to buy than compete.
The FTC has addressed this and many of the other points in the FAQ post by Facebook.
The truth is that the antitrust practices have been stuck in a rut for decades. These have been weighed down by doctrine that says that markets are defined by good.