Is Facebook a Monopoly? My quick answer to save you some time reading: no! But here’s my longer answer.
Right now, there seem to be two conversations going on about Facebook.
The first question is: “Did Facebook break any laws or betray user trust through their privacy policies and data protection?”
The second question is: “Is Facebook a monopoly?”
I believe, but I’m not sure, that both lawmakers and the public are conflating the two questions purposefully, as if Facebook is deemed a monopoly, then the government could more easily regulate it, thereby (supposedly) alleviating the concerns about data and privacy.
But they really are two separate questions that should be treated as such, so let’s address just the monopoly question. There are also technical legal definitions of monopolies that I’m not trying to address here, but I just want to look at this issue and give you my gut reactions.
Facebook has real competitors
-Other Social Media:
There is nothing wrong with Twitter, LinkedIn, Google+, and services like Apple photo sharing. They are each getting stronger every day, and basically introduce most of the features that Facebook has. However, the primary reason that people don’t jump ship easily is due to the lack of portability of their networks — it’s not a feature issue. Meaning, if your mom is on Facebook, you don’t want to tell her that she now has to join another social network or service just so that she can see the photos of your kids.
Competitors focus on this area of network relocation and are constantly innovating new ways to transport your existing friends on to other platforms. In recent days, Dock.io must be spreading like crazy, evidenced by the 15 email invites that I have received. Dock is using crypto payments as the way to incentive people to transport their networks. I wouldn’t hold them up as a Facebook competitor, but it demonstrates a business model that could allow mass portability of data networks — put a deep-pocketed company like Google or Microsoft in that model, and Facebook has problems.
Facebook faces true existential threats
-Kill or Be Killed
When Google introduced Google Plus, the folks at Facebook reportedly went into crisis mode. It was a kill or be killed moment. Google propagated its new service throughout its mass market services like Gmail, creating a distribution channel like no other. But it didn’t work. Is this an example of how even arguably the most powerful company in the world couldn’t take out Facebook? No — because Google Plus represented a competitive threat, not an existential threat. Meaning, Google Plus tried to do what Facebook does, much like Bing tried to do what Google does. They ended up as watered down versions of the original, like knock-off Reebok kicks at the dollar store.
-The Real Threats
However, Facebook faces true existential threats every day. Apple, for example, could be said to have a lock on high-end mobile devices. What if they create easier ways to share photos and updates between friends and the wider world, without the need to use any app or any website?
What if Alexa starts relaying messages between consumers and popping up messages from friends on smart TVs? What if a new company invents a way for communication technology to be embedded in everyday wearables, like jackers, shirts, and rings? These kinds of innovations could not just slowly chip away at Facebook’s hold, but rather almost instantly make it obsolete.
When a company has to worry every day about deep-pocketed competitors introducing its every feature - gunning for its blood - as well as existential threats that threaten its very existence, can you call that company a monopoly?
Facebook is free
In order to call a company a monopoly, I believe you have to show that its customers have no other choice; that a company has such a grip on a particular product that it can flex its pricing power at-will, leaving the customer with no other alternative.
Many people have been arguing that Facebook is a monopoly due its its undue “market share” of attention or consumer data, as if this is what makes for a monopoly. However, the customers of Facebook are advertisers, not consumers.
You would have to show that an advertiser has no other way to reach people — billboards, TV, content marketing, sports arenas, and you know, Google; you have to show that all of those fine alternatives don’t represent suitable advertising choices.
The only rational argument is therefore not in the pricing / client criticism, but perhaps on the user attention, data or audience perspective. It’s akin to arguing that during the yellow journalism days, that a particular newspaper chain had a monopoly on the attention of consumers and distribution networks.
This argument seems problematic as well — saying that any company has a monopoly on consumer attention implies coercion of attention, which is nigh impossible. Facebook carries and maintains its attention because people are interested in the content it provides. People’s attention is fickle though; boredom strikes easily. Young people’s attention, for example, is priceless, as it represents the next generation of interest economics. Facebook, with all it’s muscle, cannot keep young people interested.
Not a monopoly, but maybe not so great
Although not quite a #deleteFacebooker, I am far from an avid supporter or user of Facebook. Recently, I actually stopped using Facebook, or at least reduced my use of Facebook by about 95%. Personally, I think people spend too much time on it. I worry that personal connections are being lost, not gained. I also worry that each post people share exposes their insecurities, and that attention to those insecurities can sway people further in a negative direction.
I also worry about young people and especially teenage minds, already naturally tuned for social cues and influence, succumbing even more to peer pressure. But again, these are two separate conversations: one is: Is Facebook a monopoly? And the next is: Should I use Facebook myself? Let’s keep them separate and not confuse our own feelings about the service with the need for governmental action.
In the meantime, let’s have a good long thinking about how we’re using Facebook and social media, and judge how they are adding or subtracting value from our lives.