[ad_1]
The secret history of the 2018 elections in 84 color pages.
I’ll buy it
The U.S. Federal Trade Commission (FTC) announced Wednesday that it would launch a gigapert that has been suspected for some time and could even lead to Facebook fragmentation.
The FTC and 46 state prosecutors filed a total of two lawsuits, both accusing Facebook of abusing its monopoly position, limiting the scope of competition in the social media market. The lawsuit centers on two acquisitions: Facebook acquired Instagram for $ 715 million in 2012, WhatsApp for $ 22 billion in 2014, and although the transactions were approved by the competition authority at the time, the current lawsuit actually claims that these Acquisitions were good for allowing Facebook to suppress potential rivals by limiting competition.
The lawsuits also note that Facebook has done a lot to make it difficult for new players to enter the market. Then, after Mark Zuckerberg’s company became dominant, prices for advertisers began to rise as the quality of the user experience steadily deteriorated. The FTC and state action draw heavily on Dina Srinivasan’s famous 2019 study, which showed Facebook was able to boost MySpace only by offering users better privacy terms, among other things, but after gaining dominance over the market. . , the quality of Facebook users immediately began to deteriorate and they began to monitor users much more vigorously so that the data thus obtained could then be sold to advertisers.
As monopoly expert Matt Stoller writes in his quick analysis, the lawsuit appears to have argued that users were hurt by Facebook’s anti-competitive actions: Not only was Facebook increasingly spying on them, but more and more ads attacking them. But the monopoly of the market also hurt advertisers’ interests: on the one hand, ad space became more expensive, and on the other hand, their ads could often end up with harmful or even infringing content.
The presentation places great emphasis on Facebook’s internal letters, which show that the company’s top management knew exactly what they were doing from the start: Mark Zuckerberg had already written to his colleagues in 2008 that it was better to buy than compete. And the years that followed showed that the company really did think that way.
Facebook has also done a lot to “block” users on the service, meaning that they can only switch to another platform with great difficulty. Of course, the fact that Facebook wants to retain its users is absolutely understandable, but it may already be illegal, as Facebook has prevented users from taking their data and uploading content with it.
Ruined empire
If demand were to actually fragment, it could have a very noticeable impact on Zuckerberg’s digital realm: According to Bloomberg’s summary, the company has been able to post revenue growth through Instagram for some time, while WhatsApp is a component. key to Facebook’s ecommerce plans. their divestiture could seriously damage Facebook’s long-term strategy.
WhatsApp and Instagram are also extremely important for Facebook because in international markets, these two products tend to be much more exclusive than Facebook itself: in India and Brazil, for example, the number of new users on these two platforms is growing much faster than in the community. page. Also, it may have been known for some time that Facebook is getting less and less cool – that is, in the commercially important age group, the number of new users among teens is steadily and dramatically declining.
Against startups like Snapchat or TikTok, Facebook can still compete a bit through Instagram, and if the company were to lose that, they would be completely critical in reaching young people, according to Bloomberg analysis.
And you can expect Facebook’s reputation to have been badly damaged in recent years: surveillance scandals, disinformation and electoral turmoil, troll farms, moderation issues have led not only to politicians but many users. field today. it is completely different for the site. And more and more people decide they have had enough and are leaving Facebook. Ironically, there are also many people who decide to post things on the much less scandalous Instagram in the future and stay in touch with their friends on WhatsApp.
Change of humor
Of course, it is not clear whether the process will actually reach a divide: According to an analyst who told Bloomberg, if there is no Democratic majority in the Senate (which will be decided in the Georgian elections in January), there is much less chance that really close the investigation by dismantling Facebook. However, investigating the FTC and keeping the issue on the agenda could still hurt Facebook’s stock heavily.
The point of Facebook’s defense is that these transactions were previously approved by the United States government. In this regard, Stoller writes that this is true and highly embarrassing for the US competition authorities, but it is not an excuse for it if Facebook has committed infringing acts. However, under US law, he will have a good chance of being tested, and Stoller is more optimistic than the analyst who told Bloomberg: He said that the political and social mood of the public has changed so much that Congress can decide to dismember without problems. The shift in political sentiment is indicated by the fact that while in 2016 Hillary Clinton planned to place Facebook’s second man Sheryl Sandberg in her administration, Joe Biden did not accept the support of two types of companies during the inauguration period of this year: fossil energy companies and Facebook. .
Facebook has so far said that it will investigate the submissions and respond to them in detail soon. But they have been denied several times in the past that their activities would be anti-competitive.
As the Financial Times writes, the FTC began investigating Facebook’s alleged monopolistic activity in 2019, shortly after another investigation into privacy abuses in the Cambridge Analytica scandal. The latter was finally settled by Facebook with a fine of $ 5 billion.
In short order, this is the second major antitrust lawsuit in the United States: A lawsuit was filed in October against Google’s parent company Alphabet on suspicion that the company was abusing its dominance by excluding its rivals from the market for web search. Furthermore, the change in public mood is indicated by the fact that also in October, the Antitrust Subcommittee of the United States House of Representatives published a report that was born after 16 months of investigation, stating that there are fundamental problems with the form technicians have worked on so far. We also discussed this report in detail at that time.
[ad_2]
