Antitrust Evidence Against Facebook Mounts But Potential Case Complicated
There’s enough evidence for U.S. antitrust enforcers to investigate whether Facebook is undermining competition by leveraging its data against rivals, antitrust experts said. Bringing an actual case will be much more complicated, they added. One expert argued it’s unlikely the FTC or DOJ bring a case, given the ongoing Cambridge Analytica probe, other enforcement priorities and that a company is suing Facebook on anticompetitive grounds.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
“There is ample evidence to support opening an antitrust investigation by one of the agencies,” said Yale University economist Fiona Scott Morton, a DOJ antitrust official under President Barack Obama. “What they learn from the investigation would determine if there is a good case to bring.”
NBC News Tuesday reported internal documents showing a Facebook executive discussed limiting platform data access for the increasingly popular MessageMe app in March 2013 (see 1904160025). The company had no further comment for this story. Documents reviewed included previously reported emails released by the U.K. Parliament and reported by CNN. That batch showed Facebook allegedly restricted data access for Twitter video app Vine.
Open Markets Institute Enforcement Strategy Director Sally Hubbard noted the parallels, saying, “Enforcers should be investigating Facebook foreclosing competitors’ access to data.” Such behavior is “exclusionary conduct” that could support a monopolization case under Sherman Act Section 2, she wrote. “Fear and laziness” are what’s stopping enforcers from bringing a case, Hubbard’s colleague Matt Stoller wrote. The OMI fellow suggested enforcers break up the company and impose “treble damages” on CEO Mark Zuckerberg. The Washington Post reported FTC officials are exploring ways to hold him more accountable through the agency’s current investigation.
Antitrust enforcers “absolutely can and should” examine use and processing of consumer data that’s intended to exclude rivals, said American Antitrust Institute President Diana Moss. Because data is an important input for rivals to reach consumers on these platforms with products and services, it's a “credible antitrust theory of harm,” she said. “The agencies should approach concerns regarding foreclosure of rivals in the tech markets as they would in any other market.” For an antitrust inquiry to “coalesce,” Moss said enforcers need to “define” the market and identify if developers have alternatives. If the market includes other platforms, it would be “broader and the effect of alleged [Facebook] conduct commensurately lower,” she said.
It’s unlikely the FTC will bring a case to vindicate the alleged rights of an app developer, said antitrust attorney Alicia Downey. That’s because the agency is already pursuing consumer protection enforcement against Facebook, and Six4Three, creators of the Pikinis app, is suing the platform for limiting access to data. FTC enforcement resources are typically devoted to consumer protection issues, she said, rather than vindicating the concerns of a business that can bring its own action. Data leveraging against rivals could also play into the Cambridge Analytica probe, she said. DOJ typically pursues criminal antitrust violations, like price fixing, where offenders go to jail, she added.