No, Facebook is Not a Monopoly

No, Facebook is Not a Monopoly

Facebook is just like the pre-1984 AT&T monopoly, says The New York Times in a June 5 editorial. Thus it might be time for the government to “break away some of its components and chop it down to size,” suggests The Times, in order to “unleash a wave of competition and innovation” that would benefit consumers and the economy like the dissolution of the telephone monopoly.

 

The editorial further suggests that cutting Facebook down to size would bolster user privacy, though it doesn’t say much about how this might happen. That's just one of several false assumptions and common misconceptions in the editorial.

 

Let’s have a look at three of the biggest misconceptions in the piece:

 

Misconception #1: Facebook has monopoly power over the social media marketplace, just as AT&T once had over telephone service.

 

This just isn’t true. Prior to 1984, AT&T had a complete, government-sanctioned monopoly on telephone service in the US. If you were dissatisfied with AT&T and wanted to use a different telephone service, you were out of luck. AT&T was “virtually the lone source for telephone service in the United States.”

 

Contrast this with the social media landscape of 2018. Facebook and its subsidiaries have numerous competitors. YouTube, Twitter, Snapchat, and LinkedIn are just a few. In fact, competition is so intense that there is serious concern in some quarters for Facebook’s long term viability among young people.

 

Alternatively, if you don’t want to use Facebook or any of its social media competitors, that too is an option (albeit a minority one). That was not the case with AT&T's monopoly. Telephones were a necessity for virtually every adult and, prior to 1984,  AT&T was the only choice. So the analogy between Facebook and the AT&T monopoly simply doesn’t work.

 

Misconception #2: Cutting Facebook down to size will make it less likely that users’ personal data will be compromised.

 

The Times piece suggests this but merely cites to a few recent data privacy incidents involving Facebook without any evidence that such incidents would be less likely if the company were broken up. Maybe. But there is as much, if not more, reason to believe that the reverse is true. Cutting Facebook down to size would very likely result in less consistent, comprehensive, and effective handling of data privacy.

 

In fact, there is a real conflict between data privacy and antitrust regulations. While antitrust regulators call for increased third-party access to user data to avoid anticompetitive effects on the market, proposed privacy regulations are designed to have exactly the opposite effect. 

 

Finally, consider that, while politicians and advocacy groups may think drastic action is necessary in light of recent data privacy incidents, Facebook users appear less concerned. Facebook did not see a significant drop in usage after the Cambridge Analytica incident made headlines earlier this year. The politicians and advocates represent a small minority of overall users, and by calling for two conflicting methods of punitive regulation they are attempting to have their cake and eat it too. In reality, this would be just as ineffective as it is unnecessary.

 

Misconception #3: Facebook is a media company.

 

The Times calls Facebook “the most powerful communications and media company in the world.” The newspaper is not alone in calling Facebook a “media company,” but this definition is incorrect.

 

Facebook is a technology company, as CEO Mark Zuckerberg has repeatedly stated in interviews and testimony before Congress. Facebook facilitates access to the work product of media companies and creators but it creates no journalistic or media content of its own. “I consider us to be a technology company because the primary thing that we do is have engineers who write code and build products and services for other people,” Zuckerberg said in April.

 

This is a crucial distinction. If Facebook were to accept its mischaracterization as a media company it would increase the company’s liability for the content posted on its site. This, in turn, would force the company to implement stricter content filtering that would chill free and vibrant discourse on the platform to the detriment of the general public. As the Supreme Court noted last year in Packingham v. North Carolina (2017), “cyberspace ... and social media in particular” are now “the most important places … for the exchange of views.”

 

In conclusion, Facebook is not like the AT&T of old. It is much more like the AT&T of today: competing with numerous other technology companies to bring consumers an expanding number of options and services. That’s something that ought to be encouraged, not undermined.

 

 

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