Gotta Know When to Fold ‘Em: the FTC Resumes Its Antitrust Aggression
Last week, the Federal Trade Commission (FTC) appealed a federal court ruling that Meta antitrust does not have an unlawful social media monopoly. The agency’s decision to persist ignores a highly competitive social media landscape, a well-supported judicial opinion, and the cost to taxpayers. In doing so, it gambles with the legitimacy of the FTC as an agency committed to consumer welfare.
The antitrust case began with accusations that the formerly FTC approved purchase of WhatsApp and Instagram was monopolistic. The agency relied on a narrow definition of the social media market, one that excluded platforms like YouTube and TikTok. Judge Boasberg found in his decision that despite Meta’s multipronged approach to social media, the landscape had expanded and changed so drastically that Meta was nowhere near a monopoly. His decision offered a more accurate market definition, based on evidence that people use a variety of apps as a form of social networking. Considering the rising dominance of TikTok and the public’s shifting interest in consuming short form videos over content from immediate family and friends, it was obvious that Meta’s platforms were not a threat to consumer welfare—or competition for that matter.
Now, the FTC asks that the judge reconsider his findings and ignore the leveling effect that new platforms and their more social-oriented features have had on the playing field. This request has immediate implications for the consumer, because reviving an already lengthy legal crusade means asking for more tax payer dollars to fund it. Beyond the present impacts, the FTC’s success would be bad news for social media users everywhere. A potential break up for Meta would mean the features and connectivity between platforms like Instagram and Facebook could be put at risk. Certainly, it could jeopardize the user experience and potentially even harm protections that Meta’s resources allow.
While Meta is not a monopoly, it is certainly a powerful player—and this is no bad thing. In the free market, when one group excels and innovates there is a huge ripple effect. Meta’s success and innovation push other companies to strive for the same. This is the ideal environment for technology, in particular. As more consumers raise questions about how social media and artificial intelligence are impacting them and their children, social media companies are rising to the challenge of creating new and helpful tools to empower users and parents especially. Meta is among the companies innovating products to ensure a safer and more supervised experience for families. Were Meta, or any popular social media company for that matter, to suffer the kind of blow the FTC has in mind, it would undoubtedly have a cooling effect on the progress happening in this area.
Early analysis from antitrust scholars indicates that Judge Boasberg’s opinion is unlikely to change. Between the obvious competitive market reality and the consumer welfare standard, which evaluates the appropriateness of antitrust action on how a company’s behavior impacts consumers, the case against Meta seems to be a risky bet from an FTC that hasn’t learned when to fold ’em.
Links to Learn More
The Federal Trade Commission won’t give up its crusade against Meta-Reason Magazine
FTC appeals Meta antitrust ruling with a wooden racket – Competitive Enterprise Institute
