The photo was taken by Amelia Krales.
13 months ago, the Federal Trade Commission tried to break up Facebook. The lawsuit was a long time in coming, and it was laughed out of court. The FTC did not prove that Facebook had a monopoly, and thus could not proceed, as ruled by the judge.
The FTC could re-file the case with more evidence to support its central claim, and possibly go to trial, if it chose to. President Trump had been removed from office, and the FTC was run by an antitrust activist. She accepted the offer to file a revised case. The case can proceed, according to a ruling issued this week.
Cat Zakrzewski is at The Washington Post.
The facts in the revised complaint show that Facebook has a monopoly on personal social networking, which allows people to maintain relationships with family and friends online. The FTC had no data to back up its claim that there was no other social network of comparable scale in the United States. The new complaint included data from ComScore, which showed that Facebook has more daily active users in the United States than any other social networking site.
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The FTC has done its homework this time around.
The FTC just included Comscore data about the time people spend using Facebook products, along with numbers of daily and monthly active users for it and other products in the space. It is unsurprising that the Trump FTC could not clear that low bar.
The New York Times said that the FTC had a major victory in its quest to curtail the power of the biggest tech companies. It would have been embarrassing for the FTC to fail to bring its case to trial after five years of denunciation of the size and influence of Facebook.
The agency would have been embarrassed if it failed to bring its case to trial.
The FTC spent all of the year trying to keep the case viable, as I wrote when the case was filed. In 2021, TikTok was the most visited website in the world. The government would argue that TikTok is different from Facebook because it is a personal social networking service. Anyone can open up Facebook orInstagram and see how people are starting to assume more and more features of TikTok, the app it is supposedly so distinct from.
Facebook is now a metaverse company. Questions about whether it is possible to compete with other social networks feel like questions of more interest to historians than to the next generation of entrepreneurs, which are rebuilding the internet on the blockchain.
One of the oldest arguments against breaking up Facebook was that the market would eventually end the company's dominance anyway, and likely much faster than a lawsuit could. There is no doubt that Facebook is the leader in social networking. There are cracks in its armor.
The agency may well face a tall task down the road in proving its allegations, as was noted by the author. He notes that he is not allowed to assess the accuracy of the facts presented in the FTC case over and over again. His job is to determine if the facts make for plausible allegations of wrongdoing. At this point, he decides.
He rejected the part of the lawsuit that argued that Facebook had illegally restricted the transfer of data to third-party developers. The policy ended in 2013; it made any wrongdoing feel like old news.
I believe that Facebook made social networks less competitive when it acquired them. We won't know what consumer benefits we might have seen had those companies remained independent.
It was a long time ago. The lawsuit and inevitable appeals will last for many more years. Even if the government succeeds in forcing a spinout of the two companies, they will be reborn into a world that is moving on.
The FTC is moving on and this is good news for consumers. The agency has signaled that it will scrutinize any future efforts by Meta to acquire other social networking products if the lawsuit fails. As new social networks rise up in the future, the lessons learned from both of them will likely inspire more rigorous reviews of future acquisitions. The United Kingdom blocked Meta from buying a search engine that used a cartoon.
What Meta wants to buy in virtual reality is more important than what Facebook bought a decade ago.
The FTC has begun to pay attention to Meta's efforts to acquire all the biggest studios and talent in virtual reality and augmented reality. In June of last year, I wrote about the subject and it was found that Meta had already acquired a number of games. In October, it made one of its biggest purchases in the space to date, buying the makers of the hit fitness app Supernatural for $400 million.
Meta has a good knowledge of which games are selling well and which are not, and converts Quest owners into daily users. It is the sequel to Onavo, the Facebook app that provided vital early warnings about competitors. Meta wants to buy in virtual reality in 2022, more important to the future than what Facebook did a decade ago.
The Information reported last month that the FTC has opened a formal inquiry into Meta's acquisition of Within.
The first five acquisitions of Meta were not subject to a review by the U.S. antitrust regulators. The $400 million-plus Supernatural deal is being slowed down by regulators, according to two people with knowledge of the situation. Meta may not be able to finalize the acquisition for another year if the Federal Trade Commission doesn't challenge the deal in court.
This is where the FTC's attention should be: on the still-up-for-grabs present, in which Meta pumps its profits into selling the Quest 2 below cost, to great success this holiday season, and in acquiring all the most-used.
It's still important what happens to the two services. What happens on next- generation platforms may be more important than what happens today. The good news is that the FTC's lawsuit was too late to make a difference. It seems determined to not make the same mistake again.
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