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It is the next phase where the FTC faced problems. After describing the market, it should show that Facebook has power in the market. If you can get rid of just one thing in this article, let it be: In anti-competitive laws, having power in the marketplace, also known as power alone, does not mean that the company is big or prosperous. Market power has a real meaning, skill: the ability to raise prices (or reduce quality) over a long period of time without losing customers in competition.
A well-known way to demonstrate power in the market is simply to show that the company controls a large portion of the market. This method, known as anonymous evidence, is the one used by the FTC to reserve December. There is only one problem. All the evidence it provides is that Facebook “retained the largest share of the social network in the US (over 60%).” Boasberg’s views make the organization understand the charcoal fire because of this. Where does the figure of 60 percent come from? Sixty percent of what, exactly? (Users? Money? Time spent on the platform?) If Facebook has no other competitors, who makes up 30 to 40%? “These claims – which do not provide the exact number of Facebook groups anytime in the last decade – ultimately do not prove that Facebook has any power in the marketplace,” wrote Boasberg. “It is as if the council is expecting the Court to use the discretion of Facebook.”
According to Rebecca Allensworth, a law professor at Vanderbilt Law School, the FTC may have good reason to try this approach. The last few decades of anti-fraud laws have put a small amount of effort into making a successful trial, and the theory has not been developed by modern internet companies. The FTC must have been gambling that persuasion could work better than financial conflict.
“It’s a partnership between creating a conflict that stems from a complex legal framework that has grown over the last 40 years, or creating a simple and straightforward dispute,” he said. “If we go back, the most important thing we ask is, ‘Does the company have power in the market? Does the company have the power to decide what consumers get and what they don’t get, who will be allowed to compete with those who can’t, or really feel like competing with others?’ , then the whole issue should be settled, and Facebook is clearly in its infancy. ”
The fact that Boasberg did not buy those ideas does not undermine the FTC’s case. The judge gave the council 30 days to come back with real evidence that Facebook has power in the marketplace. And his point goes further, making it clear that the FTC’s strategy – forcing Facebook to sell Instagram and WhatsApp – is still on the table.
“I don’t think the court will do this unless it has carefully considered the case and will not rule on the decision,” said Paul Swanson, a Denver lawyer. “The court gives them another chance to complain about the market; they just need to be straightforward. ”
As a result, how can the FTC strengthen its position on two issues? One way is by producing tangible market evidence. Swanson said the agency has already done so. Boasberg has already accepted its meaning in the marketplace, which does not include any other social networking site other than Instagram which has Facebook. That’s why it shouldn’t be hard to convince him that Facebook has a big stake in the market. The council may need to be clear about this, and explain what it depends on.
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