Why Facebook’s Outage Exposes Big Tech Monopolistic Behaviour

14 October 2021

Facebook’s outage 

The tech-giant’s outage on Monday of last week was the biggest in its history. Caused by an internal error, the outage left Facebook, Instagram and WhatsApp’s collective 3.5 billion global users in a social media blackout for approximately five hours. 

U.S. representative Alexandria Ocasio-Cortez and Facebook Whistleblower Frances Haugne used the outage to very publicly mount fierce criticism of the platform. Both women used their respective platforms to draw attention to the wider, more sinister, socio-political consequences of the temporary shutdown. They pointed specifically to the damaging ‘monopolistic behaviour’ that ‘destabilises democracies’ and values ‘astronomical profits before people’. 

Facebook’s pervasive power has its roots in its evasion of anti-trust laws. Through this, they have gradually monopolized the social media sphere and decimated large swathes of its competition. 

What are anti-trust and competition laws? 

Before we look at why Facebook’s monopoly is both damaging and arguably unlawful, let’s take a look at some key definitions. 

Anti-trust or competition laws are statutes that are designed to shield consumers from predatory business practices and ensure a fair competitive landscape. 

These laws also aim to encourage innovation and ensure that consumers can choose from a wide range of options in the marketplace at a fair price. 

According to the EU Competition Policy,  ‘competition encourages companies to offer consumers goods and services on the most favourable terms. So it encourages efficiency and innovation and reduces prices.’ 

These laws also prevent agreements between key market stakeholders that would restrict competition and the abuse of dominance. 

What is a ‘business monopoly’? 

A monopoly is when one company and its product or services dominate its industry. This means there is little or no competition. In this situation, consumers have no choice but to buy from that company alone. 

In a market where there is a monopoly, it is extremely hard for new companies to join the market. 

How does Facebook’s Outage relate to competition law? 

In the context of the social media sector, it is quite clear that Facebook holds a disproportionate and dominant stake. It not only owns Facebook, but Instagram and Whatsapp. 

Both Haugne and Ocasio-Cortez based their respective comments around Facebook’s systematic anti-competitive behaviour.  Pointing to how the platform has consistently decimated innovative or emerging challenger social platforms. Instagram or Whatsapp are perfect examples. Facebook bought them both up as soon as it perceived them to be a credible threat to the platform. 

Why has Facebook been able to evade anti-trust law?

With a chronic lack of regulation as to the position, role, and powers of these tech-giants, companies like Facebook and Google have been able to act unfettered and unhindered. 

However, this isn’t the first time that Facebook’s ‘monopolistic’ behaviour has come under fire. In December 2020, forty-five State Prosecutors along with the US Federal Trade Commission (FTC) sued the social media company. They accused Facebook of illegally suppressing competition and taking over rivals (namely, Whatsapp and Instagram). Officials asked the court to take action to break up the conglomerate in order to diversify the market. 

The prosecution argued that Facebook take a blanket ‘buy or bury’ approach to any potential competition. This tactic, they say, is to blame for the decimation of the competitive landscape in the digital space. The FTC asserted that the only reason Facebook has come to dominate this ‘highly lucrative sector’ is because they have acquired their competition illegally. 

As New York Attorney General Letitia James put it, ‘for nearly a decade, FB has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users.’ 

Facebook obviously rebuked the charges.  The company released a statement stating: ‘antitrust laws exist to protect consumers and promote innovation, not to punish successful business’. 

In the end, the court threw out the antitrust lawsuits brought against Facebook citing lack of facts and lapse of time. This was seen by many to be a major blow to attempts to temper the growth of Silicon Valley’s ‘Big Tech’. And the decision prompted Congressional legislators to call for an update in anachronistic antitrust laws to cater to the burgeoning internet sector. 

Facebook’s Outage, its Monopoly & its Global Impact 

So what does this have to do with global democracy? Ocasio-Cortez and Haugne’s point is that ‘no company should have this much unchecked power over our personal interaction and social interactions.’ Crucially, this isn’t just insular power, this is globally pervasive power. Monday’s outage touched communities and individuals in every corner of the earth. 

During the outage, José Caparroso, editor at Forbes, tweeted about just how disproportionately devastating the outage would be for those in Latin America. Across the continent, Whatsapp is the major method of communication. Whilst those in India and the Philippines, amongst others, rely on the messaging platform for coordinating and organizing crucial infrastructure. 

 

Silicon Valley & Big Tech 

It’s not just Facebook, though. Silicon Valley’s Big Tech is all culpable. In October 2020, Google was faced with three separate antitrust charges for its role in harming competition in internet search and search advertising. The prosecution cited the fact that Google has ensured it is the ‘default search engine on browsers and smartphones’.  As well as the fact that the company’s name has become synonymous with ‘searching the internet’. 

Silicon Valley clearly has a problem. Yet although various whistleblowers have emerged to call these tech-giants out, no legal action has been successful to date. Facebook and Google have escaped unscathed, so far. Facebook’s outage may have sparked outrage once again, but until someone brings a successful charge, their global users are still subject to their blatant monopolistic behaviour.

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