The antitrust offensive against the ‘big tech’ must improve its strategy

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The antitrust offensive against the 'big tech' must improve its strategy
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Competition agencies need to review their ability to analyze data if they are to win the battle

Many tech entrepreneurs start by identifying a problem that needs to be solved. The Federal Trade Commission (FTC) did not finish that work in its antitrust lawsuit against Facebook. A judge rejected it mainly because the FTC did not show how to measure the market share of the social network. It is a bug that requires self-modification.

The FTC maintained that Mark Zuckerberg’s company, valued at $ 1 trillion, had exercised and maintained a monopoly. The good news for the agency is that, on Monday, Judge James Boasberg appeared to accept its market definition for social media, which is to make friends and family share information, in the face of Facebook’s efforts to expand it.

In a way, it is a victory. For anti-monopoly purposes, a market is traditionally defined by its products and its geography. The debate revolves around whether, for example, office supplies are just basic things like paper or include products like computers. Factors such as revenue or units sold determine market share.

As the judge pointed out, it is more difficult with internet platforms, because one can offer overlapping products and because consumers don’t pay for Facebook or, for example, a Google search. Businesses make money in another market by selling advertising.

It’s an indicator that caused the FTC to stumble. The agency claimed that Facebook had a market share of more than 60%, but did not say what, or which companies had the rest. Boasberg gave the government a month to try again. For example, you could argue that the US market for social media is the 299 million Americans who use the internet, according to Data Reportal. The 190 million active daily US users of Facebook’s eponymous network, according to Omnicore, would represent a 64% share.

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That’s wrong, in part because a typical user visits more than six different platforms on the internet each month, according to Data Reportal calculations. Let’s say the top five players are Facebook and its sister brand Instagram, Snap, Twitter, and TikTok. Together, they may have 520 million daily US users, according to Omnicore and business data. Of that total, Facebook’s share would be approximately 37%, and the sum of Facebook and Instagram would reach 63%.

That might be enough to indicate that there is monopoly power. Antitrust agencies, regardless of what they use, have to review their ability to analyze data if they are going to use traditional arguments. Another option is for legislators to change the rules, for example by restricting the use of personal data or by requiring so-called interoperability, that is, the ability for users to move content to another website. In any case, Silicon Valley is ahead of its pursuers for now.