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Facebook challenges FTC’s antitrust case with Big Tech’s tattered playbook

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Facebook challenges FTC’s antitrust case with Big Tech’s tattered playbook

Facebook has challenged the FTC’s antitrust case against it using a standard playbook that questions the agency’s arguably expansive approach to defining monopolies. But the old reliable “we’re not a monopoly because we never raised prices” and “how can it be anti-competitive if we never allowed competition” may themselves soon be challenged by new doctrine and the new administration.

In a document filed today, which you can read at the bottom of this post, Facebook lays out its case with a tone of aggrieved pathos:

By a one-vote margin, in the fraught environment of relentless criticism of Facebook for matters entirely unrelated to antitrust concerns, the agency decided to bring a case against Facebook that ignores its own prior decisions, controlling precedent, and the limits of its statutory authority.

Yes, Facebook is the victim here, and don’t you forget it. (Incidentally, the FTC, like the FCC, is designed to split 3:2 along party lines, so the “one-vote margin” is what one sees for many important measures.)

But after the requisite crying comes the reluctant explanation that the FTC doesn’t know its own business. The suit against Facebook, the company argues, should be spiked by the judge because it fails along three lines.

First, the FTC does not “allege a plausible relevant market.” After all, to have a monopoly, one must have a market over which to exert that monopoly. And the FTC, Facebook argues, has not shown this, alleging only a nebulous “personal social networking” market, and “no court has ever held that such a free goods market exists for antitrust purposes.” The FTC also ignores the “relentlessly competitive” advertising market that actually makes the company money.

Ultimately, the FTC’s efforts to structure a crabbed “use” market for a free service in which it can claim a large Facebook “share” are artificial and incoherent.

The implication here is not just that the FTC has failed to define the social media market (and Facebook won’t do so itself), but that such a market may not even exist because social media is free and the money is made in a different market. This is a variation on a standard Big Tech argument that amounts to “because we do not fall under any of the existing categories, we are effectively unregulated.” After all you cannot regulate a social media company by its advertising practices or vice versa (though they may be intertwined in some ways, they are distinct businesses in others).

Thusly Facebook attempts, like many before it, to squeeze between the cracks in the regulatory framework.

This continues with the second argument, which says that the FTC “cannot establish that Facebook has increased prices or restricted output because the agency acknowledges that Facebook’s products are offered for free and in unlimited quantities.”

The idea here is literally that if the product is free to the consumer, it is by definition not possible for the provider to have or abuse a monopoly. When the FTC argues that Facebook controls 60% of the social media market (which of course doesn’t exist anyway), what does that even mean? 60% of zero dollars, or 100%, or 20%, is still zero.

The third argument is that the behaviors the FTC singles out — purchasing up-and-coming competitors for enormous sums and nipping others in the bud by restricting access to Facebook’s platform and data — are not only perfectly legal but that the agency has no standing to challenge them, having given its blessing before and having no specific illegal activity to point to at present.

Of course the FTC revisits mergers and acquisitions all the time, and there’s precedent for unraveling them long afterward if, for instance, new information comes to light that was not available during the review process.

“Facebook acquired a small photo-sharing service in 2012, Instagram … after that acquisition was reviewed and cleared by the FTC in a unanimous 5-0 vote,” reads the document. Leaving aside the absurd characterization of the billion-dollar purchase as “small,” leaks and disclosures of internal conversations contemporary with the acquisition have cast it in a completely new light. Facebook, then far less secure than it is today, was spooked and worried that Instagram may eat its lunch, so it was better to buy than compete.

The FTC addresses this and indeed many of the other points Facebook raises in a FAQ it posted around the time of the original filing.

Now, some of these arguments may have seemed a little strange to you. For instance, why should it matter if a market has no money from consumers being exchanged, if there is value exchanged elsewhere contingent on those users’ engagement with the service? And how can the depredations of a company in the context of a free product that invades privacy (and has faced enormous fines for doing so) be judged by its actions in an adjacent market, like advertising?

The simple truth is that antitrust law and practice have been stuck in a rut for decades, weighed down by doctrine that states that markets are defined by consumer good, defined as the price of a product and whether a company can increase it arbitrarily. A steel manufacturer that absorbs its competitors by undercutting them and then later raises prices when it is the only provider is a simple example, and the type that antitrust laws were created to combat.

If that seems needlessly simplistic, well, it’s more complicated in practice and has been effective in many circumstances — but the last 30 years have shown it to be inadequate to address the more complex multibusiness domains of the likes of Microsoft, Google and Facebook (to say nothing of TechCrunch parent company Verizon, which is a whole other matter).

The ascendance of Amazon is one of the best examples of the failure of antitrust doctrine and resulted in a breakthrough paper called “Amazon’s Antitrust Paradox” that pilloried these outdated ideas and showed how network effects led to subtler but no less effective anti-competitive practices. Establishment voices decried it as naive and overreaching, and progressive voices lauded it as the next wave of antitrust philosophy.

It seems that the latter camp may win out, as the author of this controversial paper, Lina Khan, is reported to soon be nominated for the vacant fifth commissioner position at the FTC. (She has not already been nominated, as this paragraph originally stated.)

Whether or not she is confirmed (she will face fierce opposition, no doubt, as an outsider plainly opposed to the status quo), her nomination validates her view as an important one. With Khan and her allies in charge at the FTC and elsewhere, the decades-old assumptions that Facebook relies on for its pro forma rejection of the FTC lawsuit may be challenged.

That may not matter for the present lawsuit, which is unlikely to be subject to said rules given its rather retrospective character, but the gloves will be off for the next round — and make no mistake, there will be a next round.

Federal Trade Commission v Facebook Inc Dcdce-20-03590 0056.1 by TechCrunch on Scribd


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Man Recalls A Dating Catastrophe When He Invited A Felon He Met Online Over To Hangout

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YourTango

There exists a subreddit where people explain stories by setting the precedent of, “Today I F–ked Up,” called “r/TIFU.”

One man shared how he messed up by inviting a girl over to his place, not expecting the night to take a turn for the worst before he had to go to work the next day.

His second date turned into a night of horror after his date started drinking during dinner.

In order to provide some context, he explained how he met the girl on Facebook Dating and had gone on his first date with her over the weekend.

“I did notice that she only smiled with her top row of teeth in the pictures and figured that her bottom teeth might be effed up, but didn’t think much of it,” he explained, already pointing out potential red flags. “She had trad wife energy and I was into it.”

RELATED: Kindergarten Teacher Says A Mom Gave Her A Vacuum To ‘Turn On’ When Her Daughter Misbehaves

He explained that during their first date, he had learned a lot about her, including her history of battling eating disorders which explained the messed up teeth.

He learned that she doesn’t drink often and that she lives with her parents because she’s preparing for surgery that will require a lot of physical therapy.

“This is all a red herring — nothing about this TIFU has to do with the teeth,” he explains. “I wanted to mention it because I was so focused on this that I didn’t pick up the other red flags.”



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Zuckerberg says Meta Quest 3 will get Quest Pro’s key tech feature

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Renderings of the Meta Quest 3 based on leaked CAD images

Meta Quest 3 is not a reality yet but it is expected to launch this year, probably in the fall at a Meta Connect event. This will be Meta’s consumer focussed headset that will succeed the Meta Quest 2. We recently heard rumors about the headset being much slimmer with more compact display lenses than the Quest 2 and that it could run on a more powerful Qualcomm Snapdragon XR2 Gen 2 chipset. 

Now, Meta’s recent earnings release has shed some light on new information around the Quest 3. Mark Zuckerberg, the CEO of Meta, has confirmed that the Quest 3 will have support for Meta Reality — the technology that allows the headset to be used for both augmented reality as well as virtual reality. This means that the Quest 3 will be a mixed reality headset and not just have virtual reality — much like the premium, enterprise-focussed Meta Quest Pro. This is something we had heard of before, but Zuckerberg seems to have confirmed it.

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5 Android apps you shouldn’t miss this week

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Apex Legends Mobile Cinematic Scene 7

Joe Hindy / Android Authority

Welcome to the 470th edition of Android Apps Weekly. Here are the big headlines from the last week.

  • YouTube Music has an annoying censorship bug on Nest Hubs. It doesn’t let you play music with sensitive album art. You get the same warning on the phone app, but you can usually bypass it. Unfortunately, there are limited ways to bypass it on your Nest Hub. Hit the link to learn more.
  • A former Facebook employee says Facebook can intentionally kill your battery. It does so through a process termed negative testing, where the app acts out, tanks your battery, and Facebook collects the data with it. It doesn’t happen to a ton of people, but it can happen to anyone.
  • Samsung updated Good Lock this week, just in time for its Samsung Galaxy S23 launch. The update added an option to update every installed plugin at once. Previously, you had to update each one individually. It’s a minor quality-of-life improvement, but it’s a welcome one.
  • ChatGPT is getting more serious. You can now spend $20 per month for a more powerful version of OpenAI’s bot. It’s only available to US customers right now, but it may expand later. The bot is also causing waves at Google, causing the company to ramp up its own AI work.
  • Apex Legends Mobile is shutting down after less than one year. EA made the announcement just a month after half of the Internet, including us, dubbed it the best new game of 2022. EA cites challenges with the content pipeline. It makes sense, since many of the newer updates have included a host of bugs that the developers just can’t seem to squash. Oh well, it was a nice run.

Pompom: The Great Space Rescue

Price: Free / $5.49

Pompom: The Great Space Rescue is a platformer. You play as Pompom and you progress through the game by jumping through and around obstacles, avoiding enemies, and solve puzzles to progress. It pays ode to the 16-bit era of gaming, so you’ll see a lot of elements, including graphics, from that era. There are also a bunch of weapons and tools you’ll get to help you on your way. The actual gameplay has some runner elements where you run forward automatically, and that’s not a 16-bit era style, but the game is still fun.

Memori Note

Price: Free / $2.49

Memori Note screenshot 2023

Memori Note is a note-taking app with an emphasis on reminding you of things. You write down what you want in the app, ask it to remind you about it at a random time, and it’ll do just that. The app also has color coding, a tags and filters system, and we think it looks pretty nice with its muted colors. There are also some backup settings if you want to transfer notes to a new device. We’re not sure how well it’ll do long term, but it definitely has the potential.

Devil Hunter Idle

Price: Free to play

Devil Hunter Idle is an action idle game. Your character hacks and slashes its way to level-ups, loot, and resources. You use those resources to strengthen your character so they can go back out and hack and slash more bad guys. That’s the primary gameplay loop, and it plays similarly to classic games like Buff Knight. The game’s over-the-top art style makes it feel like a lot more is happening, and the player does get to control some aspects of combat. The advertising is annoying, but you can pay to remove all of them. Other than that and some early bugs, the game is decent for its genre.

Rewind: Music Time Travel

Price: Free

Rewind Music Time Travel screenshot 2023

Rewind: Music Time Travel is an app for music rediscovery. It’s basically a big timeline that you scroll through to see what the music world looked like in any given year. It’s a neat way to rediscover old hits, and remind yourself of stuff you used to listen to. When I tested this one, I used it to help fill out my YouTube Music library a little bit since I had forgotten some of the songs I used to listen to. This isn’t something you’ll use long-term, but it’s a neat little app anyway.

Checkers Clash

Price: Free to play

Checkers Clash is an online competitive game where you play checkers. It’s not a complicated experience. You get into a game with an opponent. The two of you take turns until one of you runs out of pieces or concedes the match. You can also invite your friends and play against them as well. Some other game features include 8×8 and 10×10 board options, bots to play against to improve your skill, and a rewards system where you collect various things. The matchmaking system is imperfect, as it is in almost all online games, but it’s one of the few competitive checkers apps on mobile.


If we missed any big Android apps or games releases, tell us about it in the comments.
Thank you for reading. Try these out too:

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