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Antitrust legislation is not designed to protect other companies, it's designed to protect consumers. In the United States, when the Justice Department blocks

Antitrust legislation is not designed to protect other companies, it's designed to protect consumers. In the United States, when the Justice Department blocks a merger, it is not simply deciding to disallow the merger. It does not have the power to do so. Instead, the actual mechanism is via antitrust lawsuit. If the merger is likely to reduce competition to such an extent that it would harm consumers, and if the Justice Department is so inclined, the Department files an antitrust lawsuit to block it.

alexmingoia 6y ago
I don't think the legal code for preventing acquisitions says anything about consumers. 15 USC §18 says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." Nevermind that, let's say it is about protecting consumers. How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. IIRC Facebook reduced the price of WhatsApp by removing the dollar fee.
- mav3rick 6y ago
  In the long run, this has stifled innovation. No social startup gets funding, as FB either crushes them or buys them out for cheap.
  - blackoil 6y ago
    "Cheap" is not an adjective which people used to describe those acquisitions at the moment.
- netcan 6y ago
  Are you asking "why is a monopoly bad?" or "why do acquisitions representing large market share promote monopoly?" The 2nd one is quite obvious. Afterwards, there is less competition and the aquire has increased their market share, buying power, control of a supply chain, platform, infrastructure or some other market dominance position. The 1st one... Do you prefer a theoretical reason? Empirical examples? rhetorical, political, philosophical? There are lots of reasons why monopolies are harmful. The legislation itself, and the reasoning behind it was liberal-economics... ie "capitalism." Capitalism, from a pro-captialist perspective, works because of a superior price system. Monopolies break price systems, whether they are public or private monopolies. There are a lot of other reasons too. Since this is about digital monopolies and "platform" is a primary form of market dominance.... Compare to WWW-vs-AOL. One was a closed, private, system where a single companies dominates a primary bottleneck. One was open. Do you think the WWW would have achieved what the WWW achieved if they had won that platform war?
- jlmorton 6y ago
  > How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. Consumers have been fairly directly harmed, actually. Facebook operates a walled garden, without interoperability. You can post from Facebook to Instagram, or Instagram to Facebook, but not Instagram to Snapchat. It would be nice if social networks were more open, in the spirit of the web. But they're not, and by they're nature, network effects are everything. No one wants to be on a social network that none of their friends use. Meanwhile, Facebook has been among the most aggressive data collectors, collecting all manner of data on users, and then selling and monetizing that data. Beyond that, Facebook also controls an extremely large amount of speech in the world, including political speech. All of this is directly harmful to consumers. If there were several large social networks, both of these might be mitigated, or resolved.

alexmingoia 6y ago

I don't think the legal code for preventing acquisitions says anything about consumers. 15 USC §18 says "No person engaged in commerce or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no person subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another person engaged also in commerce or in any activity affecting commerce, where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly." Nevermind that, let's say it is about protecting consumers. How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. IIRC Facebook reduced the price of WhatsApp by removing the dollar fee.

mav3rick 6y ago
In the long run, this has stifled innovation. No social startup gets funding, as FB either crushes them or buys them out for cheap.
- blackoil 6y ago
  "Cheap" is not an adjective which people used to describe those acquisitions at the moment.
netcan 6y ago
Are you asking "why is a monopoly bad?" or "why do acquisitions representing large market share promote monopoly?" The 2nd one is quite obvious. Afterwards, there is less competition and the aquire has increased their market share, buying power, control of a supply chain, platform, infrastructure or some other market dominance position. The 1st one... Do you prefer a theoretical reason? Empirical examples? rhetorical, political, philosophical? There are lots of reasons why monopolies are harmful. The legislation itself, and the reasoning behind it was liberal-economics... ie "capitalism." Capitalism, from a pro-captialist perspective, works because of a superior price system. Monopolies break price systems, whether they are public or private monopolies. There are a lot of other reasons too. Since this is about digital monopolies and "platform" is a primary form of market dominance.... Compare to WWW-vs-AOL. One was a closed, private, system where a single companies dominates a primary bottleneck. One was open. Do you think the WWW would have achieved what the WWW achieved if they had won that platform war?
jlmorton 6y ago
> How have consumers been harmed by the Instagram acquisition? Facebook didn't shut them down, substantially change the product, or force users to use their other products. Consumers have been fairly directly harmed, actually. Facebook operates a walled garden, without interoperability. You can post from Facebook to Instagram, or Instagram to Facebook, but not Instagram to Snapchat. It would be nice if social networks were more open, in the spirit of the web. But they're not, and by they're nature, network effects are everything. No one wants to be on a social network that none of their friends use. Meanwhile, Facebook has been among the most aggressive data collectors, collecting all manner of data on users, and then selling and monetizing that data. Beyond that, Facebook also controls an extremely large amount of speech in the world, including political speech. All of this is directly harmful to consumers. If there were several large social networks, both of these might be mitigated, or resolved.