By: Atty. Gregorio B. Austral, CPA
Ancient law versus evolving technology: Who’s the loser?
It is undeniable that Facebook is a company to beat. 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.
As they say, “Troubles come along with fame. The more famous you would
become, the more troubles you would encounter along the way.”
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.