Facebook is monopolistic because we like it that way.

facebook is monopolistic

Facebook is monopolistic and scary but this scene from Guam makes me forget about it.

The big news last week was that a long-awaited antitrust lawsuit was filed against Facebook. While this is no surprise, my opinion about it might be. You and I collectively created this monster because we like it this way. Read on.

Guam for the win

After an 18-month investigation, the U.S. Federal Trade Commission and 46 states, as well as the District of Columbia and Guam, filed a lawsuit alleging that Facebook employed anti-competitive tactics that allowed it to bully and bury rivals. The filing recommends breaking up the company.

I think this is especially significant for Guam. So happy you guys are in the news. Also, I wonder which four states did not participate? I’m guessing one of them is Nevada. Probably over-slept or something.

Guam aside, it seems like the New York attorney general is out for blood when she said: “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition. By using its vast troves of data and money, Facebook has squashed or hindered what the company perceived to be potential threats.”

No argument there. Still …

The sound of silence

Here’s the weird thing about this case. Nobody I know — and I mean nobody — really wants any significant disruption to happen. Don’t you think the social media community would be railing against evil Facebook and feeling some relief about this lawsuit if things are that bad? Fact is, we sort of want this action to go away.

Sure, at some point, every advertising professional has probably had a run-in with Facebook. My colleagues at B Squared Media have been fighting a random blacklisting of harmless clients (they have all be reinstated). I have been an outspoken critic of Facebook’s ethics-free leadership style (until they get caught). In fact, I predicted right before they became a public company that Facebook would become the most dangerous company on earth. One for the win column.

And yet I think everybody is a little puckered about this lawsuit, it’s like … wait a minute dear government friends … don’t mess this up too much.

Facebook is monopolistic and we love it

Of course, Facebook is monopolistic — and we want it that way.

Perhaps the biggest existential threat to the platform was Google+, touted back in the day as the “Facebook killer.” There are a lot of things Google did wrong with Plus, but the biggest issue was that we already had a social network, and it worked just fine.

The psychological switching cost of moving to another network was too high for most consumers. To switch to Google+, you had to bring all your friends and Candy Crush buddies and Groups over to this new place. Too much trouble. It was bound to fail from the beginning (Ahem … something else I predicted on the day Google+ debuted!).

This is why Facebook failed with their effort a few years ago with a rival to LinkedIn (I can’t remember what the platform was called) — we already had a LinkedIn. Why do we need another one?

Similarly, this is why we don’t hear big advertisers screaming that Facebook is monopolistic and it should be torn apart.

The ability to target and segment and measure response based on interests and behaviors of 2 billion people in one place is so powerful that it’s no surprise that advertisers are taking a back seat on this one. Remember the advertiser Facebook boycott over the summer? Me either.

Do these laws matter?

The classic idea behind breaking up monopolies is that concentrated power hurts consumers because the lack of competition leads to artificially inflated prices. But Facebook is free for us to use. No one needs Facebook in the same way that we need oil or telephone services. It’s optional. If you don’t like the way Facebook uses your data, you can leave the platform without much disruption to your life.

And for businesses, yes, ad prices have been higher because of the concentration of power … but also because the darn thing works so well. The demand for digital ads has gone up, and that raises prices because there is only so much ad space to go around.

I just think it’s weird that there are so many angry people in Washington DC while the millions of people who actually use Facebook are sort of “meh” about the whole lawsuit. Maybe the antitrust laws established in the days of the robber barons need to be reviewed for the Information Age.

Even if the government prevails, one former software engineer for Instagram told The Wall Street Journal that separating Instagram and WhatsApp from Facebook would be “one of the most difficult software engineering challenges ever undertaken,” citing the ways engineering tools, content moderation, and data centers for the apps are intertwined. Such an effort would likely take years.

I can’t believe I’m saying this.

It’s easy to dislike Zuckerberg after all these years of blunders, arrogance, and indifferent responses to serious problems like misinformation and privacy. Facebook has ruthlessly crushed competitors, but it’s not a monopoly in its actual market — advertising — and the social networking product it offers is not essential to the U.S. economy or society.

So even though it’s easy to hate Facebook, I think the government is solving the wrong problem by ignoring the misinformation issue. and the company’s boundless data collection activities. Those problems would better be solved through targeted, strictly-enforced regulations. And these mega-issues might be easier to solve if all the tech resources were concentrated in the same place (one big company could probably get a handle on this better than five smaller companies).

So I’m as surprised as you are — I’m actually supporting Facebook on this one. I think the government needs to simmer down and attack the real problem of misinformation, privacy, social media addiction, and bullying by focusing on aggressive regulations.

A prediction? After years of wrangling, Facebook will out-lawyer the government and mostly squirm out of it. There will be some penalties to help the government save face and the government will more appropriately turn its attention to regulations.

What do you think about this lawsuit? So you think Facebook is monopolistic? Do you care? And what is your opinion of Guam? I would like to go there some day. I’m open to chat about anything. Let’s just have some more Guam …

Facebook is monopolistic


Keynote speaker Mark SchaeferMark Schaefer is the executive director of Schaefer Marketing Solutions. He obviously dreams of Guam and is the author of several best-selling digital marketing books and is an acclaimed keynote speaker, college educator, and business consultant.  The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.

Illustrations courtesy Unsplash.com.

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