Lina Khan’s Facebook antitrust case theory begins to take shape


Be a federal judge James Boasberg dismissed the Federal Trade Commission’s antitrust lawsuit against Facebook in June, and he gave the agency Specific instructions On how to save it. He wrote in his opinion that the problem is that the Federal Trade Commission did not even provide the simplest evidence that Facebook is a monopolist, except for vaguely claiming that it “maintains a dominant share (over 60%) in the US personal social network market.” “As Boasberg pointed out, this inexplicably leaves some basic questions unanswered, such as: 60% of what? Who accounts for the remaining 40%? It’s a bit like accusing the driver of speeding without even mentioning the speed limit.

In order to return to the court and enter the next stage of litigation, the Federal Trade Commission must come up with something more specific.This provides an interesting early assignment for Lina Khan, she is comfirmed Just two weeks before Boasberg’s ruling was issued, he served as the agency’s commissioner. (Facebook tried to get Khan to evade the case from public criticism of large technology companies before her current job, although experts believe the chance of success is small.)

On Thursday, the US Federal Trade Commission filed a revised complaint, answering previously unanswered questions. Although it is impossible to predict how a particular judge will rule, the new material seems likely to satisfy Boasberg and keep the case alive. “In my opinion, they have solved Boasberg’s problem,” said Paul Swanson, an antitrust lawyer in Denver. He said that Facebook may not be able to avoid “prolonged document production and testimony.”

In order to prove that Facebook is a monopoly for legal purposes, the FTC does not have to prove that it is actually the only social network. They must prove that it has “market power.” In short, having market power means that you face little competition and you can do things your customers don’t like without losing any business. This is one of the main reasons why antitrust laws exist: when there is not enough competition, companies will stop trying to please their customers and start trying to squeeze them. Think about how frustrating it is when your internet provider raises prices and you realize that no one else is serving your community. This is market power.

There are two ways to show market power: indirect evidence and direct evidence. Indirect evidence usually refers to the dominant market share. (This may sound counterintuitive, but the reason is indirect It’s because being bigger by yourself doesn’t prove that the company has done something wrong-it just increases the possibilities. ) In the initial complaint, the FTC only provided circumstantial evidence, and rarely provided: the weak 60% statistics, Boasberg’s ruling was not enough. On the other hand, the revised complaint details the market share. The US Federal Trade Commission used data from the analytics company Comscore (the complaint pointed out that Facebook itself relied on the company’s data) that no matter how you divide it, Facebook controls a major share of the “personal social network service” market . According to Comscore data, since 2011, Facebook has accounted for more than 80% of the time, with at least 70% of daily active users and at least 65% of monthly active users.

The new complaint has also tightened the FTC’s definition of the market itself, which is another Important section Any monopoly case.You cannot prove that a company has market power without explaining in which market they have power exist. According to the agency, the personal social network service market has three key attributes. First, the network must be “built on a social graph that maps the connections between users and their friends, family, and other personal relationships.” Second, it must have the function of allowing users to interact with each other in “shared social spaces” (such as news feeds or groups). Third, it must allow users to find each other. (Think about how to search for someone by name on Facebook, but not in iMessage.)


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