FTC’s Facebook Redo Adds Heft, But Not Much in New Facts or Logic

August 19, 2021

Ever have the teacher tell you to redo your homework? What did you do?

You probably made your paper longer, added more facts and footnotes. Not surprisingly, government works the same as well.

As you will recall, the Federal Trade Commission launched an antitrust lawsuit against Facebook. In June, U.S. District Judge James Boasberg tossed that FTC suit, complaining that the FTC failed to offer a coherent description of the market that the social media company supposedly dominates.

“The FTC’s inability to offer any indication of the metric(s) or method(s) it used to calculate Facebook’s market share renders its vague ’60%-plus’ assertion too speculative and conclusory to go forward.” The FTC did not even bother to say who made up the other 40 percent.

Judge Boasberg did add, however, that there was some “meat” on the bones of FTC’s argument, encouraging FTC to come back and try to transform a “D” paper into an “A” paper.

So now Chair Lina Khan and the FTC have refiled with some meat, in the form of an additional 27 pages to its original 53. So what do these pages add?

Not much in terms of new facts or logic.

The FTC continues to define the market as “personal social networking services.” But it redacts the actual math that describes the components of that market. Why? Why hide from the public the very companies and their market shares that the judge demanded to see?

Is it possible that the FTC is afraid that its numbers are too shaky?

The FTC Khanate – with its staff under severe restrictions and gag orders, so it will be hard to query their reasoning – also identifies TikTok as being outside of the “personal social networking services” market. If one were to define the market by percentage of cat videos, TikTok is a vicious, toe-to-toe competitor. More to the point, doesn’t TikTok’s “friends” application make it a competitor of Facebook? The latter certainly thinks so.

Antitrust law was designed with Standard Oil, railroads, and the steel and the copper trusts in mind. These were giants who made necessities and had deals to lock out competition, harming consumers. It is abuses like those which the venerable Consumer Welfare Standard has sorted out for almost half-a-century.

Does it make sense to apply antitrust law against social media platforms that provide services for free, almost none of them necessities, and that anyone can abandon with a single click?

However Boasberg rules, the real danger is that we will degrade and diminish the one clear standard that makes antitrust work.