Memo on antitrust laws violations by Facebook
Name
Institutional
Course
Date
MEMORANDUM
TO: US Justice Department
FROM: (Name)
A fellow at the Open Markets Institute
SUBJECT: Antitrust actions should be taken against Facebook
The purpose of the memorandum is to convince the US justice department that antitrust action should break up Facebook.
Facebook has broken the antitrust law in the anti-competitive results, anti-competitive conduct, and anti-competitive acquisitions/mergers aspects. No actions have been taken towards this multi-trillion dollar company though the violations committed are apparent and observable. Anti-competitive acquisition laws breached by Facebook include the acquisition of Instagram and WhatsApp in 2014, which increases its shares in the social media hence having a vast presence in the social media scene. Facebook has also been accused of anti-competitive conduct and, as a result, misled many developers to get their targeted revenues when they got to be a public company. In Northern California, Facebook was issued a lawsuit that suggested that Mark Zuckerberg and some top officials ‘weaponized’ their user data to acquire advantages over their competitors. Anti-competitive results are on the basis that Facebook emerged as a monopoly in that at some point, it controls the tech industry (Srinivasan, 2019).
For the government not to have broken up Facebook means that there are some complications in this process. Breaking up companies as massive as Facebook is enormous and not quite often, and since this one is social media, it is even harder to break it up than others. Some complications are how one can prove that it is indeed a monopoly, determining what part of Facebook is to be broken up, and the fact that most antitrust cases take time and a lot of money, as discussed below (Jones & Kovacic., 2020).
It is difficult to establish whether Facebook is a monopoly or not as its revenues aren’t comprised of one tangible known entity and are vast; hence the difficulty in pinpointing a particular area under the antitrust law, which is also uncertain goes by. Facebook defends itself by saying it is second to Google and faces significant competition from other digital spaces such as Google, Amazon, Apple, and Snapchat. “Facebook is in an amorphous, fast-changing market. Convoluted and hard for the government to prove,” said Adam Thierer, who is a top researcher at the Mercatus Center at George Mason University. Proving the Monopoly is hard compared to other industries such as railroads, electricity, or oil.
In 1911, the government successfully broke up the Standard Oil Company along geographical lines that were straightforward. Another split-up of a company that was clear was AT&T, as it was very regulated, had separate communication for long-distance enterprises and telephone local lines. Unfortunately, when it comes to Facebook, clear and distinct lines are not there as the whole concept of social networking is connecting as many individuals across the globe as possible in as many ways possible. Having clear lines or distinctions for separation or breaking up would defeat the purpose of social networking altogether.
Another good example is the many years it took for the Department of Justice to break up Microsoft in the 1990s to the 2000s. It took about a decade. When it did happen in 2002, after being accused of violating antitrust laws and needing to separate the internet from the operating system, the company was not impacted as much. AT&T took eight years, that is, from 1974 to 1982, and still took two more years to implement the separation into eight small companies. Schwartzman says, “A lengthy lawsuit against Facebook would also consume a lot of resources at the DOJ, which might have to hire outside attorneys and other experts as it did in the Microsoft case. The expense could even require additional appropriations from Congress. It is a daunting enterprise.” I think this summarizes this point at length (Jones & Kovacic., 2020).
We have the situation and the complications that are there in cubing this issue. Some resolutions that I would recommend to the DOJ would be to take Facebook as a monopoly. It is the number one company that has more giant online users’ attention and the capability to possess control of their information or data. When they focus on this breaking, the company up would be much more comfortable.
In trying to have distinct lines on Facebook, I would urge the department to split the company into four: the Facebook platform itself, Facebook Messenger, Instagram, and Whatsapp.
Another would be stating stricter rules in how the company uses its users’ data to try to grip the company’s product, resulting in knowing how to break it up.
References
https://www.politico.com/story/2019/05/27/breaking-up-facebook-antittrust
Jones, A., & Kovacic, W. E. (2020). Antitrust’s Implementation Blind Side: Challenges to Major Expansion of US Competition Policy. The Antitrust Bulletin, 65(2), 227-255.
Srinivasan, D. (2019). The Antitrust Case Against Facebook: A Monopolist’s Journey Towards Pervasive Surveillance despite Consumers’ Preference for Privacy. Berkeley Bus. LJ, 16, 39.