The issue is straightforward: networks are the monopoly makers of the Internet era. To build one is extremely difficult, but, once built, nearly impregnable. The only possible antidote is another network that draws away the one scarce resource: attention. To that end, when it comes to the Internet, the single most effective tool in antitrust regulation is keeping social networks in separate competitive companies. That the FTC and Office of Fair Trading failed to do so in the case of Instagram and WhatsApp is to the detriment of everyone.

    What is much more questionable, though, is whether this is a great deal for society. tbh is, by definition, winning share in the zero sum competition for attention in the ultra-desirable teenage demographic in particular, and that’s good news for any would-be Facebook competitors. Why should it be ok for Facebook to simply swallow up another app, small thoughh it may currently be? Again, simply looking at narrowly-defined marketshare estimations or non-existent revenue streams is to fundamentally misunderstand how social networks work.

    Indeed, I’ve already made my position clear — social networks should not be allowed to acquire other social networks:

        Facebook should not be allowed to buy another network-based app; I would go further and make it prima facie anticompetitive for one social network to buy another. Network effects are just too powerful to allow them to be combined. For example, the current environment would look a lot different if Facebook didn’t own Instagram or WhatsApp (and, should Facebook ever lose an antitrust lawsuit, the remedy would almost certainly be spinning off Instagram and WhatsApp). 



posted by Creativity: 19 days ago