Facebook's tangle with the FTC

Back in December 2020, the Federal Trade Commission (FTC) shared a press release stating that they were suing Facebook for violating antitrust legislation and monopolizing the social media playing field. Facebook, which acquired the rival platforms Instagram in 2012 and WhatsApp messaging service in 2014 as well as instituted "anticompetitive conditions" for software developers, has used its corporate largesse to eliminate competitors via corporate buyout (FTC). With approximately 2.8 billion active users as of the fourth quarter of 2020 (via Statista), Facebook certainly has a large market share for their numerous services, including their social media webpage side (with profiles, comments, fan pages, business pages, et cetera), their peer-to-peer e-commerce site Facebook Marketplace, and their messaging application, Facebook Messenger (which allows for private and group conversations as well as video and audio chatting.) The range of services they offer could definitely entice someone to log on and spend a significant amount of time on the site (and viewing ads) -- the convenience of wishing your elementary school best friend happy birthday, sending a funny picture of your cat to your sister, putting up an ad to sell your old couch and checking out the menu of the new coffee shop that just opened down the street all in the same session is appealing to users. However, Facebook's reported 2019 profit of over $70 billion makes it difficult to argue that potential competition has little chance of being even a blip on Facebook's radar in terms of sharing customer bases and potential ad revenue. (FTC)

Sometimes people may fall into the trap of thinking of social media platforms as merely a tool -- like a wrench, they allow a user to complete a task or make a task easier. However, they are not just a neutral object, but the product of people and of companies -- people with goals and opinions, and companies that are out to make a profit and thrive. While it takes time and resources to compile evidence and build a case, it is very interesting that it is six years past the WhatsApp acquisition and eight years past the Instagram acquisition that there was finally legal movement to slow the spread of Facebook's influence. While Facebook's user base was still massive in the years of the Instagram and Whatsapp acquisitions -- 1.056 billion in the fourth quarter of 2012 and 1.393 billion in the fourth quarter of 2014, respectively -- perhaps it is not as simple as sheer number of users that spurred the Federal Trade Commission into action (Statistica). The FTC's release notes that Facebook also tried to control the landscape through anticompetitive and strict allowance of use of their application programming interfaces, or APIs, with third party applications. APIs can allow for very fluid and interconnected use of different applications, such as allowing someone to quickly make a profile on a website using their already-signed-in Facebook profile, or allowing a website access to your Facebook profile to post specific content on your behalf on your Facebook wall, such as sharing news articles or quiz results. According to the FTC, however, Facebook would only permit use of certain desireable API functions by a third party web service if that service did not create any functionalities that would compete with Facebook's stronghold on the market, and would not allow them to use these APIs if they supported, advertised or allowed users to use services from competing social media companies on their platform -- essentially telling these third party sites that if they wanted to work with Facebook, they were going to do it only on Facebook's terms, and without allowing any other social media services in on the action. This paints a different picture than just a company that has been wildly successful by providing a much desired service. While it remains to be seen what, if any, action will be taken against Facebook to break up their monopoly on the social media landscape, it will be very interesting to see how the business side of social media changes with opportunity for new ideas and services visible on the horizon.