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The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem. The mon

by jsinai 6y ago

The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem. The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this. For a time people had few alternatives to Instagram or Facebook, which were effectively in competition with each other. This meant that has Facebook monetised your data more, ie increase prices, users were forced to pay if they wanted to stay on a popular social network. TikTok is a recent phenomenon. Secondly it is not enough to consider the UX cost of switching to another platform but also the network effect. Is Mewe/Parker/Gab really a substitute for me if I don’t enjoy the network effects I have on Facebook or Instagram?

fishtacos 6y ago
"The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem" I don't use Instagram and have used Whatsapp prior to FB acquiring it. There has been no "roping in" of any sort that I have noticed, and while my experience is clearly anecdotal, there doesn't seem to be anything to link to that that I've observed. Perhaps I'm naive, but it would be good to see something concrete in this regard. "The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this." I guess I would call that profit-making, not "aggressive monetization". The alternatives exist and they are all easily accessible. Put yourself in their shoes - would you run a non-profitable enterprise? At what cost? Let's not lose touch with the fact that this is still a capitalistic economy.
pbourke 6y ago
> The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. It will be interesting to see the government prove this for Facebook while ignoring the 800lb gorillas of Google/Doubleclick or Amazon’s ad network.
- fishtacos 6y ago
  It's why this is a politicized move by the FTC. No reason to get into politics on this site, but it's pretty obvious.
  - pbourke 6y ago
    Even politically it’s just ... weird. Most of the top content on Facebook each month is sympathetic to the current administration. Facebook has arguably played the most ball with them in comparison to other tech companies.
    - disgruntledphd2 6y ago
      Yes, but FB are hated by both left and right (for entirely different reasons), so this is likely to actually go ahead. The notion that FB increase ad prices by increasing the supply of ads is completely insane though, and I hope that's a misunderstanding by the parent poster. FB/IG have an auction-based ads system, which means that you pay what other advertisers think the user is worth, rather than what you think the user is worth. In such a system, prices increasing (along with supply) is a symptom of massive, massive demand rather than a nefarious plot on FB's part. Don't get me wrong, FB have done a bunch of shady stuff over the years, but this lawsuit seems pretty wrongheaded to me.
      - jsinai 6y ago
        Hi I was referring to the cost of advertising for users not advertisers. Sure advertisers pay a cost based on an auction system which is subject to laws of supply and demand. However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place. As others have pointed out, anti-monopoly legislation os largely about preventing firms from abusing monopoly power to increase prices. If you consider the cost of using a social network to be the data the user provides, then the more data the user gives up to the use the social network, the higher the cost. Because of the strong network effect, users may have little choice but to stay on the platform if they wish to engage in the social network. The notion is that Facebook are abusing the stickiness of their social network by increasing monetisation of user data, knowing that users won’t easily leave. By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.
jfengel 6y ago
The FTC cleared FB to buy Instagram in the first place[1]. Any idea what changed? [1] https://www.reuters.com/article/us-facebook-instagram-idUSBRE87L14W20120823 https://www.reuters.com/article/us-facebook-instagram-idUSBR...
- adamcstephens 6y ago
  They realized they were wrong and there’s a growing antitrust movement in the US.
  - beezle 6y ago
    Is there precedent for such a thing? Five or ten years after approving acquisitions and then saying 'oh our bad, that was anticompetitive' I'm not a fan of FB, was only a user briefly (though still maintain whatsapp) but find that this action is a misquided attempt to punish FB because some people can't accept its success and find the platform abhorrent.

by jsinai 6y ago

fishtacos 6y ago

"The lawsuit is about Facebook’s acquisition of WhatsApp and Instagram effectively roping in users from other platforms into their advertising ecosystem" I don't use Instagram and have used Whatsapp prior to FB acquiring it. There has been no "roping in" of any sort that I have noticed, and while my experience is clearly anecdotal, there doesn't seem to be anything to link to that that I've observed. Perhaps I'm naive, but it would be good to see something concrete in this regard. "The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. By aggressively increasing advertising on Instagram and attempting to take steps to monetize WhatsApp, Facebook are raising prices. As far as I understand the question is whether it is their abuse of monopoly power that allows them to do this." I guess I would call that profit-making, not "aggressive monetization". The alternatives exist and they are all easily accessible. Put yourself in their shoes - would you run a non-profitable enterprise? At what cost? Let's not lose touch with the fact that this is still a capitalistic economy.

pbourke 6y ago

> The monetisation of your data in exchange for adverts can be seen as the cost of the platforms. It will be interesting to see the government prove this for Facebook while ignoring the 800lb gorillas of Google/Doubleclick or Amazon’s ad network.

fishtacos 6y ago
It's why this is a politicized move by the FTC. No reason to get into politics on this site, but it's pretty obvious.
- pbourke 6y ago
  Even politically it’s just ... weird. Most of the top content on Facebook each month is sympathetic to the current administration. Facebook has arguably played the most ball with them in comparison to other tech companies.
  - disgruntledphd2 6y ago
    Yes, but FB are hated by both left and right (for entirely different reasons), so this is likely to actually go ahead. The notion that FB increase ad prices by increasing the supply of ads is completely insane though, and I hope that's a misunderstanding by the parent poster. FB/IG have an auction-based ads system, which means that you pay what other advertisers think the user is worth, rather than what you think the user is worth. In such a system, prices increasing (along with supply) is a symptom of massive, massive demand rather than a nefarious plot on FB's part. Don't get me wrong, FB have done a bunch of shady stuff over the years, but this lawsuit seems pretty wrongheaded to me.
    - jsinai 6y ago
      Hi I was referring to the cost of advertising for users not advertisers. Sure advertisers pay a cost based on an auction system which is subject to laws of supply and demand. However the cost that users pay for engaging on the platform is the use of their data. So I guess what I meant by aggressively increase the “price” of advertising was referring to the hidden cost of Facebook being able to serve adverts in the first place. As others have pointed out, anti-monopoly legislation os largely about preventing firms from abusing monopoly power to increase prices. If you consider the cost of using a social network to be the data the user provides, then the more data the user gives up to the use the social network, the higher the cost. Because of the strong network effect, users may have little choice but to stay on the platform if they wish to engage in the social network. The notion is that Facebook are abusing the stickiness of their social network by increasing monetisation of user data, knowing that users won’t easily leave. By purchasing Instagram and WhatsApp, at the time the two biggest threats to engagement on Facebook the website, Facebook the company are able to coalesce the three networks, making stickiness stronger, making it easier to raise prices (consumption of user data in exchange for adverts) and thereby abusing a monopoly position.

jfengel 6y ago

The FTC cleared FB to buy Instagram in the first place[1]. Any idea what changed? [1] https://www.reuters.com/article/us-facebook-instagram-idUSBRE87L14W20120823 https://www.reuters.com/article/us-facebook-instagram-idUSBR...

adamcstephens 6y ago
They realized they were wrong and there’s a growing antitrust movement in the US.
- beezle 6y ago
  Is there precedent for such a thing? Five or ten years after approving acquisitions and then saying 'oh our bad, that was anticompetitive' I'm not a fan of FB, was only a user briefly (though still maintain whatsapp) but find that this action is a misquided attempt to punish FB because some people can't accept its success and find the platform abhorrent.