Does Facebook have monopoly power?

The right metric for this market share analysis is unequivocally revenue — daily active users (DAU) x average revenue per user (ARPU). And Facebook controls over 90\%. This is a chart of Facebook’s monopoly — 91\% of the personal social networking market.

What kind of monopoly is Facebook?

And that is, indeed, what Facebook has become: not just a monopoly, but a natural monopoly. The company is, without doubt, a monopoly; it possesses dominant share in several subsectors of the consumer internet industry, be they social media, web-based text messaging or photo-sharing.

Why Facebook is a harmful monopoly?

Existing antitrust laws prioritize consideration of how a company’s market saturation affects costs to consumers over time. Because Facebook makes its money through advertising, and is free to consumers, its financial impact on users makes it difficult for regulatory bodies to apply standard monopoly measures.

Why is Facebook breaking the law?

The FTC sued Facebook in December 2020, alleging the company had violated antitrust law through practices like buying up competitors like Instagram and WhatsApp.

Does Facebook have a monopoly on social media?

Fifth, the glue that holds it all together is Facebook’s monopoly over data. Its ownership and control of the personal information of Facebook users and nonusers alike is unmatched. With that control the social-media giant can manipulate our thoughts, votes and purchase decisions.

How did Facebook achieve market power?

There are three pillars of Facebook’s market power: high switching costs, strong network effects and access to data. Let’s briefly explore each before getting to some of the impacts. One key way to create size is to make switching to another social platform difficult. This is exactly what Facebook has done.

Does Facebook have any competition?

As much as Facebook earns relatively more from advertising, Google remains the major competitor in advertising. It currently has more than 123,000 fulltime employees and 80000 contractors and commands a search share of 91.45\% of traffic in the world as of 2021.

What is Facebook being investigated for?

O) on Tuesday, accusing CEO Mark Zuckerberg of pushing for higher profits while being cavalier about user safety, and they demanded regulators investigate whistleblower accusations that the social media company harms children’s mental health and stokes divisions.

What is Facebook being accused of?

The Federal Trade Commission has sued the company, accusing it of violating antitrust laws by holding a monopoly on social networking through its acquisitions of Instagram and the messaging app WhatsApp.

Are there any true monopolies?

Few companies have a true monopoly in any market. More common are “virtual monopolies” or “near-monopolies” that exist due to geography or brand recognition. When consumers hear the term monopoly, the first thing that comes to mind is often price-fixing and other illegal business practices.

Does Facebook have a monopoly power?

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James, who led the states’ investigation.

Is Facebook using its market power to crush smaller competitors?

The suit accuses Facebook of abusing its market power to quash smaller competitors. “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users,” said James in a statement.

Was Facebook’s ‘systematic strategy to eliminate threats to its monopoly’ illegal?

The lawsuits claim these emails show that Facebook was operating a “systematic strategy to eliminate threats to its monopoly”. This would be a breach of the Sherman Act, one of the US’s oldest antitrust laws.

Did Facebook buy Instagram and WhatsApp to destroy competition?

Federal and state regulators of both parties, who have investigated the company for over 18 months, said in separate lawsuits that Facebook’s purchases, especially Instagram for $1 billion in 2012 and WhatsApp for $19 billion two years later, eliminated competition that could have one day challenged the company’s dominance.