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Meena Alnajar is an��IPilogue��Writer, IP Innovation Clinic Fellow, and a 2L JD Candidate at Osgoode Hall Law School��

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On October 4, 2021,��it was publicized that Facebook Inc.����the U.S Federal Trade Commission’s (FTC) antitrust case that aims to force Facebook��to��sell Instagram and��WhatsApp. The FTC initially filed a complaint that����and��requested the sale of Instagram and��WhatsApp��to prevent a monopoly over the social media market. Does Facebook��have a monopoly over the market?��Or��simply��a strong foothold?����

What is Antitrust��

The FTC’s Bureau of Competition enforces antitrust laws. These laws��. The market is said to be ‘free’ and active when there is aggressive competition. This competition is productive for society because it gives��such as lower prices, higher quality products and services,��and��greater��innovation.��

Antitrust laws try to����which are those monopolies obtained, preserved,��or attempted by a firm that tried to destroy its competitors on purpose. Under��, attempted monopolization is an antitrust offence if it meets certain criteria. The defendant must have employed����to obtain a monopoly in a defined relevant market. Second, there may be a dangerous probability that a��defendant will succeed in obtaining a monopoly unless��. While the FTC may appear to be blocking Facebook’s ability to maximize wealth by acquiring Instagram and��WhatsApp, this FTC case may be trying to preserve the competition and economic activity in the social media marketplace. In this particular case, the����and that Facebook controls 60% of the relevant market.����

Antitrust and Monopolies in the Tech Sphere��

Social media may be a broad, general marketplace and thus fail��to meet��one of the criteria under Section 2. Most social networks exist��in a niche, trying to����like 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 on����in which case����over��WhatsApp��and 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.����

Facebook’s rebuttal����

Facebook has requested the FTC’s case be��. Facebook argues that the����with Instagram and��WhatsApp��which may demonstrate a limited factual basis that Facebook��since it acted with FTC’s approval. Further, social media is a rapidly changing market and Facebook still has��including��TikTok, Twitter,��and��Google.��

Conclusion����

People experienced the primary issue with Facebook’s mergers firsthand with the����outage 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��Instagram, or��concerned loved ones who rely on��WhatsApp��to communicate. Perhaps if the app trifecta was separated, the outage would not have affected us at all. However, Facebook is a corporation,��and��corporations aim to maximize wealth.��The FTC once agreed with this when����Facebook’s purchases of����in the first place. It may be hard for the FTC to go back on their word and undo these��-dollar deals.

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The explosion of digital services delivered via telecommunication networks is creating a challenge for the old regulatory framework. Voice, text, photos-videos are offered by services via the availability of connectivity services by network operators on the Internet. We are talking about Skype, WhatsApp and Google on our smartphones, which are able to offer communication systems to costumers at a very low cost with extremely handling software.

By contrast, some problems arise by confusing terms and conditions, a lack of availability concerning emergency services and blurred personal data protection for users and end-users. This regulatory asymmetry is causing a significant distortion in market competition because Electronic Communication Providers are bearing the cost of this conflicting regulation. Thus, the key question is: how should the regulation of Over-The-Top (OTT) digital services be managed in the Internet age?

Over-the-Top Services (OTT): Definition and Market Perspective

First of all, is: “the buzz expression for services carried over the networks, delivering value to customers, but without any carrier services provider being involved in planning, selling, provisioning, or servicing them – and of course without any traditional telco booking revenue directly from them”.

To have a broader idea, VoIP (Voice over the Internet Protocol) services across devices are worldwide from 572 million in 2013 to over 1.5 billion at the end of 2018.�� For instance, WhatsApp is expected to to allow use for its 600 million active users.

On the whole, it is a big threat for telecom operators by lowering their income from calls and SMS services; nevertheless, this is very convenient for users and consumers by expanding their product choice. In the EU, legislation to engage appropriate market regulation are almost obsolete, threatening the public interest as well failing to adequately protect consumers in a framework of distorted competition .

Regulation and Legislation in EU: State of the Art

For telecommunications regulation in EU, it is necessary to start with the New Regulatory Framework (NRF) . This new formula is required for all forms of communication or transmission technology. Due to the fact that the old concept of telecommunication becomes obsolete, we are approaching to new definitions such as Electronic Communication Services (ECS). If the NRF establishes a unique regime for conveyance or conduit services, the area of content is regulated differently by EU law, which distinguishes between ‘audiovisual media services’ (AMS) and ‘information society services’ (ISS). Recital no.9 of the Directive provides that ISS are covered by the which includes services that are more than ‘wholly or mainly in the conveyance of signals’. By contrast, AMS deal with provision or exercise of .

According to Walden: “The boundary between this latter activity and the provision of electronic communication services is particularly blurred, given the potential variety of interpretations of the phrase “mainly in the conveyance of signals” (Walden, at 147). From one side, the ISS definition posits its limits concerning new business models into the digital market (e.g. OTTs). On the other side, the ECS definition has recently come under discussion by the Commission to remove ex ante specific obligations for traditional voice services, looking for progressive reduction of regulation and approaching on more competitive models. (recital no. 1-6 and recommendation no. 3)

If interpreted narrowly, OTTs would not be considered an ECS because it does not consist of a ‘conveyance of signals’ which requires a transmission service that users must subscribe or have access to. In other words, we uncover a paradox: e-mail services provided by telecommunication operators belong to ECS, whilst email services supplied by OTT providers belong to ISS. From a consumer’s point of view however this service is exactly the same, when they have no interest about the different technical definitions that apply.

How Should the Regulation of Over-the-Top (OTT) Digital Services Be Managed in the Internet Age? Proposed Solutions

In seeking a solution to this, illustrates the EU’s political stance on this issue. From this, we can identify three main solutions:

• The assumption ‘conveyance of signals’ in ECS on the Framework Directive should either be modified or deleted. In line with the Recommendation on Relevant Markets we continue to search for a new definition that includes: services previously were ISS and are subsequently OTT; digital services ��that are -at least apparently- provided for free; as well as traditional calls and SMS/MMS messaging;
• Reasoning from a cross-sector perspective focused on privacy and data protection. General Data Protection Regulation should represent an alternative to resolve this challenge introducing several obligations described in the E-Privacy Directive . To be precise GDPR does not exclude ECS from its scope, so, both GDPR and EDP are referring to ECS. This double regime pushes up overlaps, uncertainty and lack of transparency for operators and users. According to art. 86 (1)-(2) of GDPR, almost some parts of EPD should be deleted;
• Security obligations and guarantees (e.g. emergency calls, sector specific privacy rules, number portability, etc.) provided by Framework Directive to telecom operators should be maintained and incorporated into a . Providing horizontal guarantees to consumers and preventing regulatory arbitrage might be fundamental to restore fair competition between telecom operators and OTTs.

Finally, sustain that if network operators are suffering financial losses due to consumers switching from traditional services to OTTs – in absence of an immediate and proportionate measure to fix this situation – they could invest in market opportunities such as network sharing and making partnerships with providers.

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