If you’re using Facebook for personal use and you’re curious about how Facebook is a monopoly, check out this article! The article is a quick look at the social networking site and why it has become the dominant player in the market. It also highlights the need for antitrust regulation.
91% of the personal social networking market
Facebook is the most popular social networking site in the world. According to the company, over 2.2 billion monthly users visit Facebook. In addition, the average Facebook user spends a good hour of their day on the site.
Facebook has recently made it a point to increase the privacy of its users. For example, the company recently announced plans to tackle spreading false information. A few months back, Facebook uncovered that 87 million users were being tracked by Cambridge Analytica, the company that reportedly harvested their data.
Another interesting fact is that the newest social network to be added to the company’s portfolio is Instagram, a standalone photo app acquired for a paltry $1 billion. While Instagram does not have the most extensive user base, its impressive graphics and camera capabilities make it an attractive for widemanyesses.
Google dominates digital advertising on social media
The search engine giant Google dominates digital advertising. It is the most significant player in the social media world, and the company has recently reported strong growth in ad revenue. In addition, it has emerged as the most trusted publisher, with a 98% trust score.
But advertisers are confronting high prices and numerous conflicts of interest. And some companies have come forward with concerns about broader shifts in ad spending on the internet.
A recent study by the U.K.’s Competition and Markets Authority found that Google and Facebook have become dominant players in the digital ad market. These two companies have captured around 54% of all digital ad dollars in the U.S. and are expected to capture nearly one-fifth globally by 2022.
Facebook has clear rules of governance and property rights
Regarding Facebook’s rules and regulations, there are few, if any, that is groundbreaking. Instead, the company has primarily opted to rely on automated algorithms to determine which content deserves to be deleted. As a result, its policy is not only confusing, but it also appears to have no discernible impact on users.
One example is Facebook’s DIO policy, which attempts to stitch together a list of leaders and organizations that threaten bloodshed. It includes long-dead historical figures, charities, medical institutions, and hundreds of musical acts. Some of these entities are not even relevant to the social networking giant’s business model, but they have been banned for a good reason.
Another is Facebook’s Community Standards, which outline which types of posts should get you booted from the social networking site. For instance, it is not allowed to engage in “neutral speech” about child nudity. But it is permitted to discuss firearms.
Facebook harms Americans by stifling creator wages
If you’ve ever wondered why Facebook hurts Americans, you might be asking yourself if the company isn’t a monopoly. It’s indeed a monopoly, but it’s also clear that it’s not only a monopoly; it’s a monopoly that stifles creators’ wages.
Facebook’s monopoly in personal social networking is giant. According to the FTC, if a company controls more than 60 percent of the market, it’s a monopoly. So the company must do this right and must define that market.
To define the monopoly, the FTC needs to know what the market is and what the dominant share is. There are different types of markets, and the FTC can argue that Facebook stifles creator wages in the creator economy.
To determine whether a company controls over 60% of a market, the FTC has to meet two tests: one focused on obviousness and one focused on consumer harm. Unfortunately, both tests are incredibly abstract, and they’re not designed to account for Big Tech.
Antitrust scholar and law professor has argued for the need to rein in influential firms.
In the last few years, there has been an explosion of attention on antitrust issues. Both presidential candidates have called for strengthening enforcement of the law, and a growing number of research centers have released briefings on the topic.
The problem with antitrust is that the rules do not effectively curb the economic power of corporations. Instead, they create a system in which companies with political power can lobby for laws and regulations. They also tend to be wealthier than their customers and workers. This leads to an unequal economic system that produces economic inequality.
Antitrust scholar and law professor Lina Khan has made a strong case that our legal system should rein in the most influential firms. Her argument is particularly relevant to the United States, where tech companies are amassing immense structural power.