6/17/2019

Facebook and Antitrust, Part 1: What Is the Relevant Market?

"Even if one thinks intervention is needed, it is still difficult to determine what the relevant market is for antitrust purposes. If broadly defined as social media, it is easy to identify other large and successful market competitors like Twitter. Similarly, even more narrow services like encrypted messaging offered by Facebook-owned WhatsApp have significant competitors like Signal and Telegram.

In many cases, these substitutes show that using Facebook is a consumer choice for reasons of familiarity and convenience, but users can and will make other choices. For example, Telegram reported three million new signups when WhatsApp and Facebook experienced outage and connectivity problems in March. Similarly, 43 percent of adults surveyed had left a social media platform at some point, and the number is even higher for younger demographics. Many others are “on” Facebook and count as users, but rarely use the service after signing up. What is clear is, however it is defined, this market is volatile, constantly-evolving, and “contestable” in economic terms."