Photo by Brett Jordan ()
Meena Alnajar is anÌýIPilogueÌýWriter, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law SchoolÌý
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On October 4, 2021,Ìýit was publicized that Facebook Inc.ÌýÌýthe U.S Federal Trade Commission’s (FTC) antitrust case that aims to force FacebookÌýtoÌýsell Instagram andÌýWhatsApp. The FTC initially filed a complaint thatÌýÌýandÌýrequested the sale of Instagram andÌýWhatsAppÌýto prevent a monopoly over the social media market. Does FacebookÌýhave a monopoly over the market?ÌýOrÌýsimplyÌýa strong foothold?ÌýÌý
What is AntitrustÌý
The FTC’s Bureau of Competition enforces antitrust laws. These lawsÌý. The market is said to be ‘free’ and active when there is aggressive competition. This competition is productive for society because it givesÌýsuch as lower prices, higher quality products and services,ÌýandÌýgreaterÌýinnovation.Ìý
Antitrust laws try toÌýÌýwhich are those monopolies obtained, preserved,Ìýor attempted by a firm that tried to destroy its competitors on purpose. UnderÌý, attempted monopolization is an antitrust offence if it meets certain criteria. The defendant must have employedÌýÌýto obtain a monopoly in a defined relevant market. Second, there may be a dangerous probability that aÌýdefendant will succeed in obtaining a monopoly unlessÌý. While the FTC may appear to be blocking Facebook’s ability to maximize wealth by acquiring Instagram andÌýWhatsApp, this FTC case may be trying to preserve the competition and economic activity in the social media marketplace. In this particular case, theÌýÌýand that Facebook controls 60% of the relevant market.ÌýÌý
Antitrust and Monopolies in the Tech SphereÌý
Social media may be a broad, general marketplace and thus failÌýto meetÌýone of the criteria under Section 2. Most social networks existÌýin a niche, trying toÌýÌýlike Facebook once did, connecting people from around the world and writing on each other’s 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 onÌýÌýin which caseÌýÌýoverÌýWhatsAppÌýand Instagram. However, antitrust cases are few in high-tech industries, so FTC’s current complaint is difficult to compare in outcome due to limited jurisprudence.ÌýÌý
Facebook’s rebuttalÌýÌý
Facebook has requested the FTC’s case beÌý. Facebook argues that theÌýÌýwith Instagram andÌýWhatsAppÌýwhich may demonstrate a limited factual basis that FacebookÌýsince it acted with FTC’s approval. Further, social media is a rapidly changing market and Facebook still hasÌýincludingÌýTikTok, Twitter,ÌýandÌýGoogle.Ìý
ConclusionÌýÌý
People experienced the primary issue with Facebook’s mergers firsthand with theÌýÌýoutage 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 onÌýInstagram, orÌýconcerned loved ones who rely onÌýWhatsAppÌýto communicate. Perhaps if the app trifecta was separated, the outage would not have affected us at all. However, Facebook is a corporation,ÌýandÌýcorporations aim to maximize wealth.ÌýThe FTC once agreed with this whenÌýÌýFacebook’s purchases ofÌýÌýin the first place. It may be hard for the FTC to go back on their word and undo theseÌý-dollar deals.