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When a federal judge James Boasberg dismissed antitrust lawsuit against federal trade commission in June against Facebook, nice to give the agency specific instructions how to recover. The problem, he said, was that the FTC did not provide even the slightest evidence to prove that Facebook is a monopoly, “which kept the U.S. social media market (over 60) beyond the vague claim. Percentage).” As Boasberg pointed out, clearly. he left some basic questions unanswered, such as: why 60%? Who makes up the remaining 40 percent? Not to mention the speed limit was like accusing a driver of speeding.
To go back to court and move on to the next phase of the lawsuit, the FTC would have to return something much more specific. This presented an interesting initial task for Lina Khan confirm as commissioner of the agency two weeks before Boasberg gave his verdict. (Facebook has sought to dismiss Khan’s case based on public criticism of major technology companies prior to his current job, even though experts see little chance of success.)
On Thursday, the FTC filed its revised complaint in response to these unanswered questions. Although it is impossible to predict how a particular judge will govern, it seems that the new materials will satisfy Boasberg and keep the case alive. “I think they’ve broken Boasberg’s itch,” said Paul Swanson, a Denver monopoly lawyer. Facebook, he said, may not be able to avoid the “long slogan of document production and deposits”.
To prove that Facebook is a monopoly for legal purposes, the FTC does not have to show that it is literally the only social network. They need to show that they have “market strength”. In short, being a market force means that you have so little competition that you can do things that customers don’t like without losing business. One of the main reasons why antitrust law exists is that when competition is not enough, companies will stop trying to please their customers and start trying to squeeze them. Think how frustrating it is when your internet provider raises prices and realizes that no one else is serving your neighborhood. That is the power of the market.
There are two ways to show market strength: indirect evidence and direct evidence. Indirect evidence usually refers to the main market share. (That may seem like a contradiction, but that’s the reason indirect because being big on its own doesn’t prove that the company is doing anything wrong – it just raises a strong possibility.) In the initial complaint, the FTC offered only indirect evidence, and very little: that weak 60 percent statistic that Boasberg ruled was inappropriate. The revised complaint, on the other hand, goes into great detail in market shares. Using data from the analytics company Comscore — the complaint says Facebook is also based on it — the FTC believes that in any way, Facebook controls a major portion of the market for “personal social media services”. According to Comscore data, Facebook has accounted for more than 80% of the time spent since 2011, with at least 70% of daily active users and at least 65% of monthly active users.
The new complaint also hardens the FTC’s definition of the market itself, which is another one decisive part in any case of monopolization. You can’t prove that a company has market power without explaining what market power it has in. According to the agency, the social media services market has three key attributes. First, a network “should be built on a social graph that maps connections between users and their friends, relatives, and other personal connections.” Second, users must have the ability to interact in a “shared social space,” as in a news feed or group. Third, it should allow users to look at each other. (Think about how you can search for someone’s name on Facebook, but not iMessage.)
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