Facebook, anti-trust, and the coming regulatory storm

Was I happy when I heard that the FTC and more than 40 states were accusing Facebook of anti-competitive behavior and demanding they spin off Instagram and WhatsApp? Happy is an understatement. I was ecstatic.

Digging into the details, this seems like an important first step, but a difficult one. Anti-competitive behavior is hard to prove—especially when those acquisitions were approved less than a decade ago—though in this case it’s pretty well known how Facebook has had a chilling effect on the social media industry with its buy, copy, or kill approach.

The problem is in the framing: thinking of Facebook as a social media company.

I agree with Zuckerberg’s push back that Facebook is competing with “Google, Twitter, Snapchat, iMessage, TikTok, YouTube and more consumer apps, to many others in advertising.” It’s that last one that’s key: at its heart, Facebook is an advertising company. That is its business model, where its power comes from, and where, with Google (who is already facing an anti-trust suit of its own related to its search power), it holds the most market dominance. Zuckerberg is not wrong that thinking of Facebook as a social media company is overly simplistic, he’s just wrong that the collective power of anything other than Google, Amazon, or Apple poses any real competitive threat.

And there’s the rub, which gets at part of the reason tech is so hard to regulate in the first place: the Big Four are competing on several fronts, across several time horizons, at once—and our regulatory and legal tools to engage on those fronts are not exactly cutting edge.

To really regulate the tech industry, the power of all four giants will have to be brought to heel simultaneously. There’s a reason Zuckerberg has called his company’s breakup an “existential” threat: its size is what makes it a part of the Big Four in the first place.

This lawsuit also doesn’t address the elephant in the room when it comes to Facebook: their anti-democratic content practices. Spinning off Instagram and WhatsApp only makes regulating hate speech, misinformation, and everything in between the problem of three separate teams—and Facebook’s flagship is still what causes the most damage. The company has proven itself unwilling to truly tackle these issues, and my hope is that some combination of regulatory, legal, and legislative pressure—such as a long-needed update to Section 230—will finally cause movement.

So while I’m optimistic about these first few shots against tech in a war that will probably last more than a decade, I’m also sober about where we have to go from here.