My paper, “The Antitrust Case Against Facebook,” details the quintessential market power fact-patterns that standard economics and competition law have made familiar. Facebook’s ability to inflict harm today on both consumers and news publishers rests heavily, though not exclusively, on a single practice that Facebook engages in: surveillance. Facebook not only tracks users while they are on its site; it also follows them after they leave Facebook itself. This singular ability to surveil customers—across millions of independent and sometimes competitive businesses—is the source of Facebook’s unusually high profit margins in digital advertising, as well as its ability to inflict harm on market participants. Facebook could not get away with this when it faced real competition.
Tag: Dina Srinivasan
Srinivasan’s paper is a sprightly and readable thing, but it clocks in at 80-some pages, so you may prefer her summarizing articlefor the Institute for New Economic Thinking. Either way, take note of the legal maneuvers she makes, which go even farther than Kahn did: Srinivasan makes a solid case that even the nearly useless Reagan version of antitrust law can be stretched to fit Facebook, in light of the case she lays out.
Srinivasan’s history of Facebook’s surveillance rollout makes link between monopoly and surveillance clear. For its first ten years, Facebook sold itself as the pro-privacy alternative to systems like Myspace, Orkut, and other competitors, repeatedly promising that it wouldn’t track or analyze its users activity. As each of Facebook’s competitors disappeared, Facebook advanced its surveillance technology, often running up against user resistance. But as the number Facebook alternatives could go declined — because Facebook crushed them or bought them — Facebook’s surveillance became more aggressive. Today, with Facebook as the sole dominant social network, people who leave Facebook end up joining Instagram, a Facebook subsidiary.
This is a topic Tim Wu, Charles Duhigg and Lina Khan have discussed. A summary of the paper was also published by the Institute for New Economic Thinking.