Comment: Antitrust law should change the relationship status of Facebook and Instagram



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SINGAPORE: Facebook is not cool, my students say. Parents and other relatives are there. So they are teachers like me.

Students have Facebook accounts. They mainly use them to post pictures of landmarks that they do not mind seeing their relatives, such as the summoning.

Instagram is where they spend their time.

Surely this can not last. Facebook was cool with students from about 2007 through 2015. Instagram should become uncool any day now. After all, some teachers like me are getting the hang of it.

Read: The embarrassment of using Instagram as a 50-something, a comment

What will be the next social network? There are no obvious competitors. Back to Facebook?

Facebook owns Instagram, so the two have little incentive to innovate as long as users who get tired of one simply follow each other.

Many of my colleagues who teach communication agree that Facebook is anti-legal, or more precisely, unethical. Your free sharing of customer data – and slow response to fake news on your platforms – are your reasons.

We are all stuck, choosing from the giants Facebook networks.

READ: Someone needs to do something about Facebook – but what? One comment

login on instagram

(Photo: Unsplash / Katka Pavlickova)

RESPONSES TO ANTITRUST LAW

Social networks could benefit from more competition. The antitrust law – called competition law in many jurisdictions, including Singapore – has possible answers. This is the kind of law that the Singapore authorities used in 2018 to fine Grab and Uber for their merger.

The most drastic solution? Antitrust regulators may force Facebook to sell Instagram, and perhaps WhatsApp as well. Worth considering.

Under United States law, the Clayton Act of 1914 allows the government to ban or undo mergers and acquisitions of competing companies.

If Facebook and a completely independent Instagram were competing for our attention, the theory is that they would innovate faster to avoid losing users.

Networks can launch more resources. Users of Chinese social media giants love features, including the integration of e-commerce and digital payments, which are lacking on Facebook networks.

Maybe Facebook and Instagram even competed in dimensions like how much they protect our privacy.

Antitrust experts are increasingly advocating a breakup on Facebook. Notable is Professor Tim Wu of Columbia Law School, who in 2018 published The Curse of Bigness. Facebook's Liberty campaign also calls for antitrust action.

FILE PHOTO - People in front of a logo at the Facebook headquarters in London

People stand in front of a logo at Facebook's headquarters in London on December 4, 2017. (Photo: REUTERS / Toby Melville)

READ: The real reason why Google and Facebook should be divided? China, one comment

For over a century, US lawmakers have passed antitrust laws to prevent monopolies that reduce consumer choice. Standard Oil controlled 90 percent of the oil business and cut prices to put competitors out of business. Regulators have divided into dozens of independent companies and competitors.

In November, President Trump said his administration is investigating the antitrust lawsuit against Facebook and other technology giants.

Facebook will be well armed for battle. In November, he hired an antitrust lawyer from the US Department of Justice for his own legal department.

Just a few days ago, the New York Times reported Facebook's plans to integrate its messaging platforms – WhatsApp, Instagram messages and Facebook Messenger – integrating its infrastructure. The measure would further reduce consumer choice and make it more difficult to divide the company, but not impossible.

Regulators in the UK and the European Union are also exploring options. In December, the UK Parliament released emails from Facebook executives, obtained by their investigations, which show possibly anti-competitive behavior.

In a 2013 email, Mark Zuckerberg decided not to allow users of Twitter's video-sharing app, Vine, to find their Facebook friends on Vine.

Many nations have laws that regulate competition in their jurisdictions, although things get complicated when global social networks are involved.

The WhatsApp application logo is seen on a smartphone in this illustration

The WhatsApp application logo is seen on a smartphone in this illustration, September 15, 2017. (Photo: Reuters / Dado Ruvic)

Individual nations can take action against Facebook. But if the goal is a global division of Facebook and Instagram into competing companies, it would likely prompt US authorities to force the sale of Instagram.

How did we get here and how to get out

There is a simpler alternative to dismembering a corporation: do not let it win over your competitors in the first place.

US and European antitrust regulators did not back down when Facebook acquired Instagram in 2012 and WhatsApp in 2014.

In 2012, UK regulators did not see Instagram, a camera application, as a direct competitor to Facebook. They said, "Consumers take and upload photos but do not spend a significant amount of time" in the Instagram application, so they have few marketing opportunities.

US antitrust regulators may have reached similar conclusions, but they do not disclose their arguments to allow the acquisition to proceed.

Facebook undoubtedly recognized Instagram as a potential competitor, but regulators had no forecast. Although Instagram focuses on photos, it is, after all, a social network in which many users spend more time than on Facebook. Advertising is now fully integrated.

person walk through instagram on the phone

(Photo: Unsplash / Katka Pavlickova)

The way American authorities have applied antitrust law in the last half-century presents obstacles to aggressive action against social networks.

In recent decades, US regulators and courts have focused the antitrust analysis on whether consumers pay more for a monopoly, rather than broader questions about consumer choice. As a result, antitrust oversight has declined.

Regulators have not separated a company since 1982, when they split the AT & T phone company into regional phone companies. Twenty years ago, antitrust regulators tried to split up Microsoft, which was grouping its Internet Explorer browser with its operating system, but the case was settled under conditions that did not break.

If the question the authorities ask is whether social network users pay more because of the acquisition of Instagram by Facebook, the answer is no, because social networks do not require users to pay in dollars. We "pay" with the data we disclose, which networks use to sell targeted advertising to us.

If the question the authorities ask is whether the acquisition has hurt competition – consumer choices – the answer is certainly yes.

That is the question regulators should ask. US authorities should revive interpretations of antitrust law that largely focus on whether competition is suffering.

A breakup of Facebook is worth considering. It is too early in the history of social media for winners and losers to be decided, and for winners to have the same owner and little incentive to innovate.

Less drastic measures, such as fines for reducing competition in a country – as the fines that Singapore, then the Philippines, imposed on the Grab-Uber merger – help increase the pressure to preserve competition.

Read: Grab, the new ruler in the city, and the paradox of climbing a business, a commentary

An investigation concluded that the merger between Uber and Grab substantially reduced competition in

An investigation has found that the merger between Uber and Grab has substantially reduced competition in the sidewalk market in Singapore & # 39; (Photo: AFP / ROSLAN RAHMAN)

We can also learn from the past. If Facebook tries to buy another social network – like Snapchat, which it tried to buy in 2013 – consumers around the world should express their disapproval. Regulators should stop it.

THE CASE FOR MULTIPLE NETWORKS

I do not believe that deleting a Facebook account is the answer to individual users dissatisfied with it. What we all construct – a network that connects many of us globally – has value.

Facebook allowed me to stay in touch with alumni at the school where I teach. It is good to preserve these low maintenance relationships with people from different times in our lives. It was better while everyone was still building their networks and posting regularly.

If a large number of users quit or become inactive on Facebook – and perhaps also on Instagram – and competitors proliferate, what would be the downside?

The answer from the textbook is that a network gains value to its users when more people participate. It loses value as people leave or become less active.

Bigger is better. A social network strikes us when we meet people across the street and across the globe, and we can stay in touch with everyone on the same network.

If users of major social networks – Facebook's 2 billion users and Instagram's 1 billion users – scatter into smaller, distinct networks, Facebook would no longer be fulfilling its declared mission of "connecting the world." We would lose something if no big global network took its place.

Although textbooks tell us that the value of a network increases with more users, my students remind me of another perspective.

There is no way to spend time on the same network as everyone you know.

We can learn from young people who are happy to keep accounts on multiple networks. They occasionally post on Facebook and regularly on Instagram. For chat, they occasionally use Facebook applications – Facebook and Instagram and WhatsApp messaging services – but talk more with their colleagues on the Telegram.

WhatsApp and Facebook icons are seen on an iPhone in Manchester, UK.

WhatsApp and Facebook icons are seen on an iPhone in Manchester, UK, on ​​March 27, 2017. (Photo: REUTERS / Phil Noble)

How willing would you be to join a new social network? It would be a nuisance to send invitations to friends again. The law also has a possible antidote. Platforms might be needed to allow us to download our connections and transfer them to other platforms if our connections allow.

Perhaps the emergence of a new social network is not such a remote possibility, especially if the network offers innovative features. Many of us may enjoy exploring new social networks just as we travel in different offline social circles.

To restore competition, I urge regulators to break Facebook and Instagram. In the meantime, if another network starts to gain momentum, sign me up.

And this time, I may even pay attention to the privacy policy.

Mark Cenite is Professor of Media Law and is Associate (Academic) President of Wee Kim Wee School of Communication & Information at Nanyang Technological University.

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