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