Atty. Gregorio B. Austral, CPA
Ancient law versus modern technology
In many instances, modern technology runs in conflict with law. There is nothing wrong with this situation if there is a wrong that must be addressed through the passage of law. A problem arises when regulators attempt to regulate new technology with an ancient law.
One example is social media giant Facebook. It is undeniable that it is still a company to beat, although many would assert that it has lost its stronghold in Generation Z. It is the envy of those who want to penetrate the social media market with success. With all the fame, glamor, and power Facebook now enjoys, accusations here and there are hurled against the company mostly for violation of antitrust or competition laws around the world and for illegal intrusion into one’s privacy. Well, the Facebook model is successful because almost all users agree to become the willing victims so to speak. Users, their personal information, and preferences become the product that commands a hefty price with no single cent going to them.
The US Federal Trade Commission (FTC) slapped the Zuckerberg empire with an antitrust case. The FTC wanted to disintegrate Facebook from Instagram and WhatsApp. But the FTC’s approach is bizarre. The FTC’s strategy to unwind Facebook’s purchases of Instagram and WhatsApp is a unique line of attack. First, FTC reviewed and approved the acquisitions in 2012 and 2014. Now, the agency argues that they are part of a broader strategy by Facebook to monopolize social media. Why only now?
Surprisingly, the government regulator kneeled before the social media giant when the US Federal Court ruled the FTC failed to prove that Facebook commands monopoly power in the domestic social-networking market.
“Although the court does not agree with all of Facebook’s contentions here, it ultimately concurs that the agency’s complaint is legally insufficient and must therefore be dismissed,” the U.S. District Court for the District of Columbia ruled.
“The FTC has failed to plead enough facts to plausibly establish a necessary element of all of its Section 2 claims — namely, that Facebook has monopoly power in the market for Personal Social Networking (PSN) Service.
The complaint is undoubtedly light on specific factual allegations regarding consumer-switching preferences,” the court wrote. “These allegations — which do not even provide an estimated actual figure or range for Facebook’s market share at any point over the past ten years — ultimately fall short of plausibly establishing that Facebook holds market power.
No monopoly? How could there be a monopoly when the law that defines it is as old as Methuselah? Simply put, when we apply ancient laws to a business model that never occurred in the wildest imagination of the lawmakers several centuries ago, the wolf escapes unscathed.