Peril of Facebook’s social media monopoly laid bare following blackout

After the massive social media outage reportedly caused by a mistake on Facebook’s routers, attention is turning to the United States Federal Trade Commission (FTC) antitrust lawsuit against Facebook.

The FTC is currently engaged in a struggle to address what they have identified as the overarching problem with Facebook, which exhibits the characteristics of a monopoly. In part, the antitrust lawsuit making its way through the courts seeks to address this imbalance in the market. 

“Antitrust” is legislation by governments that aims to prevent the creation of monopolies by businesses to ensure fair competition in industries. So, for example, if a business were to buy out some of their strongest competitors, they would be dominating the relevant sector and thus violating antitrust laws.

This is precisely what the FTC has charged Facebook with attempting to do. Accordingly, on December 9, 2020, the FTC and forty-six states initiated a lawsuit against Facebook for the “illegal monopolisation” of social networking platforms.

The FTC claimed that Facebook was utilising acquisitions and mergers as a strategy to eliminate and hinder competition while enhancing its monopoly on social networking. Another allegation was that Facebook also imposed “anticompetitive conditions on software developers” for the same end.

Facebook, of course, had asked for the case to be dismissed, claiming that the social networking company had several competitors. However, the authorised federal judge dismissed the lawsuit in June 2021 due to a lack of evidence.

On August 19, 2021, the FTC returned with an amended complaint. This revision of the original lawsuit included additional arguments that accused the social media giant of illegal monopolisation and “buy-or-bury schemes” that obstruct competition.

The FTC claimed that innovation in the social media industry became an existential threat for Facebook as its services began falling short of the new developments, thus leading them to “illegally acquiring innovative competitors and burying successful app developers.”

The new allegations also emphasised that Facebook has imposed its intrusive advertising model on its users due to their monopoly and lack of substantial competition.

On October 4, 2021, Facebook replied with a new request to have the case dismissed. Once again, the company denied allegations regarding monopoly status and claimed that there is intense competition against the social networking services owned by Facebook. However, according to the FTC, none of those “competing” services is in the same league as Facebook, which has considerable power to abuse.

The judge’s decision about whether or not the lawsuit will be dismissed again is to be declared until mid-November.

If the FTC wins the lawsuit, Facebook could be subject to regulations that control the company’s mergers and acquisitions and might have to sell parts of the business, including Instagram and WhatsApp, in addition to other possible measures. 

Facebook had acquired Instagram for one billion dollars in 2012 and WhatsApp for nineteen billion dollars in 2014. The company also bought several other smaller businesses, like Oculus VR, with only a handful of them publicly disclosed. The outages in Facebook servers affected these services as well since the company acquired them.

The communication lines of billions of social media users were cut off with Facebook’s server problem. As a result, some flocked to the social networking services, primarily Twitter, that were still standing, and downloads of Signal and Telegram that pose an alternative to WhatsApp surged.

The outage occurred in the wake of two significant developments for Facebook. The worrisome statements by Frances Haugen, or “the Facebook whistle-blower” on October 3, and the request for the dismissal of the FTC lawsuit on October 4.

The massive outages are merely the symptoms of Facebook’s monopoly over some of the most popular social media platforms on the planet. The real question is: will Facebook get away with it again?