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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.
    - disgruntledphd2 6y ago
      > 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. Unfortunately this is a wildly speculative argument, which is unlikely to find favour with regulators in this case. Even if it weren't speculative, how do you define the value of data? Is it by bits and bytes, or as the expected lift from incorporating it into a model? If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you. > 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. This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost. Additionally, if (hypothetically) one chooses to make advertising-supported websites illegal, then that leads to FB (and Google) shutting down, which I don't see as a net positive for the world. (Certainly most of their users wouldn't think so). > 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. So I don't agree with your argument about prices, so I'm not going to engage with it further (if you need to explain what a standard term means in the context of your argument, that's normally a warning sign). However, IG had 20mn users when it got acquired. The consensus here was that it was a terrible idea and that FB would shut it down. We're now in a world where it has 1bn users and mints money for FB. Now, it definitely looks like FB acted badly. But consider the alternative. FB are blocked from buying IG, so IG need to set up a sales team, an adevertising method and epxand globally. None of these things are cheap or trivial. There does exist a world where IG competes on a level-playing field independently, but I would argue that at least 80% of the time, this hypothetical leads to IG either under-performing or flaming out. And to be fair, at the time of the IG purchase, the biggest threat to Facebook was mobile (once upon a time, FB had no ads on mobile). Whatsapp again, should have been stopped by the EU, but there were little to no competition concerns raised within the US based on that acquisition, as nobody in the US used Whatsapp at the time.

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.
  - disgruntledphd2 6y ago
    > 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. Unfortunately this is a wildly speculative argument, which is unlikely to find favour with regulators in this case. Even if it weren't speculative, how do you define the value of data? Is it by bits and bytes, or as the expected lift from incorporating it into a model? If I improve FB's/Google's ad models, do I increase the cost of all of their users? That seems ludicrous to me, but maybe that seems fine to you. > 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. This is a trade. You and I may think this is a poor trade, but it's one that many, many users make (and like) daily. In no sense is it a cost. Additionally, if (hypothetically) one chooses to make advertising-supported websites illegal, then that leads to FB (and Google) shutting down, which I don't see as a net positive for the world. (Certainly most of their users wouldn't think so). > 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. So I don't agree with your argument about prices, so I'm not going to engage with it further (if you need to explain what a standard term means in the context of your argument, that's normally a warning sign). However, IG had 20mn users when it got acquired. The consensus here was that it was a terrible idea and that FB would shut it down. We're now in a world where it has 1bn users and mints money for FB. Now, it definitely looks like FB acted badly. But consider the alternative. FB are blocked from buying IG, so IG need to set up a sales team, an adevertising method and epxand globally. None of these things are cheap or trivial. There does exist a world where IG competes on a level-playing field independently, but I would argue that at least 80% of the time, this hypothetical leads to IG either under-performing or flaming out. And to be fair, at the time of the IG purchase, the biggest threat to Facebook was mobile (once upon a time, FB had no ads on mobile). Whatsapp again, should have been stopped by the EU, but there were little to no competition concerns raised within the US based on that acquisition, as nobody in the US used Whatsapp at the time.