Preventing Facebook’s Domination of the Digital Sphere

The Internet has a steadily increasing presence in our lives. We live in an attention economy in which a seemingly endless stream of sites attempts to seize every second of our time. Although the Internet places immense positive power in our hands by giving us access to unlimited information and connecting us to others, it can also be a place vulnerable to corruption and monopolizing influence. This vulnerability is worrisome because preventing or prosecuting harmful behavior on the Internet is extremely difficult. The digital space is still a Wild West within United States law that needs to be defined, and finding ways to protect users can be challenging. 

A recent case, Federal Trade Commission v. Facebook, Inc., has shown how current laws fail to accurately describe and detect problems on the Internet. The Federal Trade Commission has brought out a lawsuit against Facebook (which has recently rebranded itself under the parent company name Meta) [1] for exercising monopoly power in the Person Social Networking Services market [2]. Facebook is one of the most influential and controversial powers on the Internet. Its new name, “Meta,” means self-referential. This rebrand is fitting for the company; it dominates the digital space so that everything on the Internet seems to somehow lead back to Facebook. This overwhelming presence of the site has drawn concern from those who understand the significance of the Internet in our daily lives. The case has had numerous setbacks, though, and its progress is hindered by a lack of understanding surrounding the Internet in United States law. In this article, I will overview why the Federal Trade Commission has grounds to sue Facebook, why its filings have failed so far, and how FTC v. Facebook is a case that should be used to reconsider the definition of monopolies in the digital age.  

The Federal Trade Commission, or the FTC, originally filed a lawsuit against Facebook in December of 2020 [3]. The FTC pursued this case alongside over forty American states and territories [4]. This staggeringly large show of support from the states was possible because Facebook’s digital monopoly threatens interstate commerce and therefore is subject to prosecution from the states. 

The FTC accused Facebook of violating Section 2 of the Sherman Act, which prohibits any attempt to “monopolize any part of the trade or commerce among the several States” [5]. The commission also charged Facebook for disobeying Section 7 of the Clayton Act, which furthermore restricts monopolization under the Federal Trade Commission [6]. These claims were primarily fueled by Facebook’s acquisitions of Instagram (bought for $1 billion) and WhatsApp (acquired for $19 billion) [7].  Facebook bought out these huge social media companies, not for the betterment of its own platform but to rid itself of competition. 

The company used its immense influence to strong-arm these smaller (but still powerful) platforms into being bought so that it could tighten its hold on the social media space. This behavior is a form of trust-building. Online platforms are especially vulnerable to trusts because algorithms can divert digital traffic to big sites. Billions of people flock onto these digital hubs because they are the primary pathway through which we connect to the Internet. Facebook is one of the Internet’s flagship social hubs and therefore has a strong grip on a huge portion of the world. Since it has such established control, the public is unlikely to abandon the site; in fact, it only appears to grow by swallowing smaller platforms. If this trend continues, Facebook could go on to evolve further and gain control over even more people. The FTC demonstrated that intervention is necessary to prevent damage to the development of the digital sphere. 

This is not Facebook’s first time under scrutiny. With the site’s immense popularity comes countless questions surrounding the integrity of its CEO, Mark Zuckerberg, as well as the company’s past scandals. The site is not known for being careful when protecting its users; in April of 2021, it faced mass legal action after leaking the personal data of over 530 million people [8]. According to the New York Times, in October of 2021, “Britain’s antitrust authority fined Facebook $70 million for breaching reporting rules related to an investigation of the company’s acquisition of Giphy” [9]. The site has also faced scrutiny for limiting First Amendment free speech rights (leading to a lawsuit in July of 2021 from former President Donald Trump) [10]. This suit was quickly dismissed since private companies cannot violate the First Amendment [11], but it still highlights the company’s control over its users' speech. Facebook’s history of opaque dealings and control over its users is concerning. If the site’s behavior is allowed to continue, it could spell out negative consequences for the entire Internet in the future; Facebook could continue to expand its influence and become a hulking Internet monopoly. This fear is only strengthened by Zuckerberg’s recent rebrand and attempts to branch out into the world of virtual reality through the Metaverse. 

Although some may see Facebook’s threat to consumers as obvious, there has been some pushback that has kept the case residing in controversy. The federal judge presiding over the case, James E. Boasberg of the U.S. District Court for the District of Columbia, has thrown out the FTC’s complaints multiple times [12]. He has persistently requested re-filings that can provide more facts proving that Facebook exercises monopoly power [13]. 

As Facebook points out in its first motion for dismissal, “the FTC still has no valid factual basis for alleging monopoly power” [14]. Despite the plethora of evidence showing that Facebook exercises astounding dominance in the digital world, there exist numerous counter-arguments that support Facebook’s legal stance. Applying the law to the Internet can be difficult, and Facebook has used its unique position as a digital company to avoid prosecution. Understanding Facebook’s counter-arguments and their weaknesses is key to unlocking the larger problem at stake in this case: our understanding of the law within the growingly important world of the Internet. 

The first argument that exists to support Facebook is the fact that Facebook is far from alone in the digital space. Unique sites and technologies constantly redefine the Internet. Emerging platforms, such as the new and widely popular TikTok, can skyrocket into the market overnight on the Internet.

These new platforms do pose some competition initially, but Facebook is not truly threatened by their existence long-term. In Facebook’s motion for dismissal, it points to TikTok as a competitor, but this is an app that is new on the scene [15]. When Facebook actually begins to feel threatened by different sites getting traffic, it will use its substantive funds to either directly buy out its competition or hire people to recreate the features of its competition. Facebook directly bought out Instagram and WhatsApp when they got too big, but before these buyouts, it began to mimic the apps instead. For example, the site established its sub-feature Facebook Messenger in 2011 [16]. The Messenger system essentially copied the function of WhatsApp before it was acquired for $19 billion in 2014 [17]. In its motion for dismissal, Facebook claims that other apps pose “attractive options for consumers,” but these alternatives are so easily copied by the bigger platform that their importance is negligible [18].

The second argument that exists for Facebook’s growth is the concept of interconnectedness. Facebook’s mission statement is to “bring the world closer together” [19]. It is hard to find fault in this mission and consolidating the Internet’s major companies seems to put users into a tighter and apparently more connected space. Upon first glance, it may appear straightforward to desire a more connected interface that is easier for its users to navigate. For example, if Facebook acquires Instagram and WhatsApp, then it becomes a simple process for the average user to switch between writing a long update post, uploading a photograph, and privately messaging a friend. 

Theoretically, this system should make it easier to access what you wish to see. Yet, putting together all of these apps does not necessarily connect people more. Facebook actively works hard to inhibit natural streams of communication. Its algorithm is slanted toward what the site’s controllers desire. This algorithm is mysterious even within the company’s own ranks [20]. It seems to arbitrarily choose what you get to consume, so it is possible you will not even see the posts of some of your closest friends. The site also closely monitors and restricts free speech (which, although legal, again restricts true connection and expression) [21]. 

Furthermore, in consolidating the Internet’s platforms, it stunts innovation within the entire market. This means that long-term, users will get less development on the sites that they use since they are no longer competing with one another. Their dependency can also make outages much more damaging, as when Facebook, Instagram, and WhatsApp all crashed on the same day in October of 2021 [22]. Trust-building in any space can be dangerous because damage to the ruling trust can have ripple effects in the lives of billions. 

A third point that supports Facebook is the commonly held opinion that the United States government should not be overly involved in the dealings of companies. The Federal Trade Commission is a federal agency and, although it exists to guide the general trajectory of fair markets, some may argue that it is getting too involved in the Facebook case. The Sherman and Clayton Acts set up boundaries with, as the judge presiding over FTC v. Facebook called them, “precise economic meaning” [23]. Extending the charge of monopoly power could be seen as overstepping the role of the federal government to decide the function of our markets. 

The problem with this point is the fundamentally different role that digital platforms play in our lives than more traditional companies. The Internet subtly leeches into our personal time and psyche; restricting its reach is more about protecting consumers’ mental states than their wallets. When the Sherman Act was first passed in 1890 (and the Clayton Acts in 1912), there was no way for its makers to predict the creation and soon-to-be overwhelming power of social media. The FTC is recognizing that Facebook has a stronghold on consumers both within and outside the realm of economics. The agency has identified a problem larger than Facebook’s monopoly power; it recognizes that we need to reshape parts of the law to understand the entirely new world that is the Internet. 

The FTC v. Facebook case is trapped in a constant cycle of dismissal and refiling because it uses legal jargon that has not yet been adapted to the digital age. The FTC claims that Facebook “is illegally maintaining its personal social networking monopoly,” but monopolies are only considered within economic parameters in United States law [24]. As Judge Boasberg has stated, “‘monopoly power’ is a term of art under federal law with a precise economic meaning” [25]. As defined by the FTC itself, a monopoly is a firm that has “the long term ability to raise price or exclude competitors” [26]. Although Facebook has excluded competitors, it is also a free app. Therefore, as it shows in its motion for dismissal, it does not have direct economic control over its competitors or consumers.

Yet, the company does have undeniable economic advantages in the digital space. Although the company does not charge an initial fee to sign up, it does advertise to its users. Facebook is a well-established household name used by billions of people, so it has immense control over advertising. The company stated in 2019 that it had 8 million advertisers and generated over $69.7 billion in advertising in a year [27]. It can control the prices that it charges advertisers because of the sheer amount of companies that wish to use Facebook to advertise. Smaller companies may not be able to stay afloat without paywalls if advertisers flock to Facebook. 

Even by archaic definitions of monopoly power, the FTC is charging Facebook fairly. As Senator Richard Blumenthal, a Connecticut Democrat and member of the Federal Judiciary, stated, the court's rejection of the case under our current laws concerning monopolies is “a flabbergasting assertion given Facebook’s firm grip over consumers, their data and the social media market” [28]. Yet, the example of Facebook allows us to expand our assumptions about monopolies beyond purely economic terms. Facebook is threatening because it monopolizes more than just monetary services. On the Internet, you can also have monopolies on time and information. 

The Internet is a world that is hungry for your time. While Facebook doesn’t charge its users exorbitant cash amounts, it does require users to pay for it with their attention. On the Internet, users are constantly redirected to Facebook. Its post-sharing links are embedded on almost every site, and it is one of the first options that shows up when you sign in to your phone’s app-buying platform. By acquiring other companies, it forces users to spend more and more time on sites that it owns. This gives Facebook a monopoly on time. 

Spending time on Facebook means that one reads the site’s articles and posts, views its photos, and watches its videos. Even if one uses its sister sites, they are viewing content that must be approved by Facebook’s policies, and as aforementioned, it is very difficult to escape from Facebook when you go online. The site has so many users and such control over time that it’s also able to assert control over the spread of information on the Internet. The site can control which new articles appear on one’s feed and what updates one’s friends see. This reality gives Facebook a monopoly on information. 

Although defining monopolies on time and information can be vague and fruitless when dealing with conventional, economically-focused companies, on the Internet these factors can be directly measured. Screen time, user activity, and advertising spending are all factors that can be accounted for and used to prove Facebook’s dominance in the digital world. The problem is that monopolies are primarily defined through traditional economic terms. The Internet is anything but traditional and has its own mores and stakes that need to be considered. Therefore, how we define monopolies on the Internet should be different from how we define monopolies outside of the Internet. It is a new space and needs new laws to govern it. This rule extends past just monopolies -- the Judge presiding over FTC v. Facebook indicated how the “agency’s definition for social media was too vague” [29]. We cannot try to shape Internet problems to traditional molds; instead, we must understand the Internet through its own terms. 

A large part of securing change in Internet-based law is ensuring Congressional awareness and action. FTC v. Facebook, as well as testimonies from whistleblowers at Facebook, has brought attention to the governance of digital platforms [30]. The incoming chair of the Senate antitrust subcommittee, Senator Amy Klobuchar of Minnesota, has proposed wholesale changes to our antitrust laws to mitigate the influence of Big Tech [31]. Changing our laws in this manner would be a huge step forward in protecting Internet users. If Klobuchar’s legislation is passed, then the FTC will have renewed support in its case. 

No matter the results of the case, FTC v. Facebook is important because it may ensure that social media does not become stuck in the grip of a monopoly. It has also simply brought concerns about Big Tech and general Internet matters into Congressional discussion. We need to start looking at the Internet through what is at stake within it and not what applies to external matters. The Internet is its own world, and preventing digital monopolies is one step toward understanding it in new terms. 

References

[1] Heath, Alex. “Mark Zuckerberg on Why Facebook Is Rebranding to Meta.” The Verge, October 28, 2021. Accessed November 10, 2021. https://www.theverge.com/22749919/mark-zuckerberg-facebook-meta-company-rebrand. 

[2] Federal Trade Commission v. Facebook, Inc., US Case 1:20-cv-03590-JEB. 

[3] Ibid. 

[4] Kang, Cecila. “Judge Throws Out 2 Antitrust Cases Against Facebook” The New York Times, October 4, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/06/28/technology/facebook-ftc-lawsuit.html. 

[5] 15 U.S. Code § 2

[6] 15 U.S.C. §§ 12-27

[7] Shead, Sam. “Facebook owns the four most downloaded apps of the decade.” BBC News, December 18, 2019. Accessed November 10, 2021. https://www.bbc.com/news/technology-50838013. 

[8] “Facebook faces mass legal action over data leak.” BBC News, April 16, 2021. Accessed November 10, 2021. https://www.bbc.com/news/technology-56772772. 

[9] Kang, Cecilia. “Mark Zuckerberg will be added to a Facebook privacy lawsuit.” The New York Times, October 20, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/10/20/technology/mark-zuckerberg-facebook-lawsuit.html. 

[10] Cevallos, Danny. “Trump sues Facebook, Google and Twitter in class-action lawsuits sure to fail.” NBC News, July 7, 2021. Accessed November 10, 2021. https://www.nbcnews.com/think/opinion/trump-sues-facebook-google-twitter-class-action-lawsuits-sure-fail-ncna1273289. 

[11] 47 U.S. Code § 230

[12] Kang, Cecila. “Judge Throws Out 2 Antitrust Cases Against Facebook” The New York Times, October 4, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/06/28/technology/facebook-ftc-lawsuit.html. 

[13] Ibid. 

[14] Federal Trade Commission v. Facebook, Inc., US Case 1:20-cv-03590-JEB Document 83-1. 

[15] Ibid. 

[16] Bradshaw, Tim. “Facebook launches Messenger app.” Financial Times, August 10, 2011. Accessed November 10, 2021.  https://www.ft.com/content/c1975e8a-c372-11e0-b163-00144feabdc0. 

[17] Deutsch, Alison. “WhatsApp: The Best Meta Purchase Ever?” Investopedia, November 4, 2021. Access November 10, 2021. https://www.investopedia.com/articles/investing/032515/whatsapp-best-facebook-purchase-ever.asp. 

[18] Federal Trade Commission v. Facebook, Inc., US Case 1:20-cv-03590-JEB Document 83-1. 

[19] “FAQs.” Facebook Investor Relations, 2019. Accessed November 10, 2021. https://investor.fb.com/resources/default.aspx#:~:text=Facebook%20Investor%20Relations%3F-,What%20is%20Facebook%27s%20mission%20statement%3F,express%20what%20matters%20to%20them. 

[20] Oremus, Will. “Who Controls Your Facebook Feed.” Slate, January 3, 2016. Accessed November 10, 2021. http://www.slate.com/articles/technology/cover_story/2016/01/how_facebook_s_news_feed_algorithm_works.html. 

[21] Illing, Sean. “The First Amendment has a Facebook problem.” Vox, May 5, 2021. Accessed November 10, 2021. https://www.vox.com/policy-and-politics/22356339/free-speech-facebook-twitter-big-tech-first-amendment. 

[22] Wakefield, Jane. “What happened to Facebook, WhatsApp, and Instagram?” BBC News, October 5, 2021. Accessed November 10, 2021. https://www.bbc.com/news/technology-58800670. 

[23] Kang, Cecila. “Judge Throws Out 2 Antitrust Cases Against Facebook” The New York Times, October 4, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/06/28/technology/facebook-ftc-lawsuit.html. 

[24] “FTC Sues Facebook for Illegal Monopolization.” Ftc.gov, December 9, 2020. Accessed November 10, 2021. https://www.ftc.gov/news-events/press-releases/2020/12/ftc-sues-facebook-illegal-monopolization. 

[25] Kang, Cecila. “Judge Throws Out 2 Antitrust Cases Against Facebook” The New York Times, October 4, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/06/28/technology/facebook-ftc-lawsuit.html. 

[26] “Monopolization Defined.” Ftc.gov, https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined. 

[27] Iyengar, Rishi. “Here's how big Facebook's ad business really is.” CNN, July 1, 2020. Accessed November 10, 2021. https://www.cnn.com/2020/06/30/tech/facebook-ad-business-boycott/index.html. 

[28] Kang, Cecila. “Judge Throws Out 2 Antitrust Cases Against Facebook.” The New York Times, October 4, 2021. Accessed November 10, 2021. https://www.nytimes.com/2021/06/28/technology/facebook-ftc-lawsuit.html. 

[29] Ibid. 

[30] Slotink, Daniel. “Whistle-blower tells Congress that Facebook is not able to effectively police anti-vaccine information.” The New York Times, October 5, 2021. https://www.nytimes.com/live/2021/10/05/technology/facebook-whistleblower-frances-haugen.  

[31] Hamilton and Tilley. “Competition and Antitrust Law Enforcement Act Proposes Wholesale Changes to U.S. Antitrust Law.” The National Law Review, Volume XI, Number 314. February 15, 2021. Accessed November 10, 2021. https://www.natlawreview.com/article/competition-and-antirust-law-enforcement-act-proposes-wholesale-changes-to-us.