Monday, January 16, 2023
108 Iowa L. Rev. 859 (2023)

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Abstract

At this very moment, Facebook’s future is at a turning point—both online in the “Metaverse” and also in the courts. In December 2020, the Federal Trade Commission (“FTC”) filed a lawsuit against Facebook alleging it had violated Section 2 of the Sherman Act. After initially dismissing the case with leave to amend, on January 11, 2022, the court stated that the agency had plausibly alleged monopolization and allowed the case to proceed. In its complaint, the FTC asserts that Facebook violated U.S. antitrust laws by monopolizing the Personal Social Networking (“PSN”) market. In antitrust litigation, very often one of the first and most important steps is alleging the market in which a firm has purportedly engaged in anticompetitive conduct. Although Facebook started and continues to be thought of as a social networking website, today it is just as much an essential advertising platform for businesses who pay for display ads that appear in users’ feeds. Indeed, Facebook, which also owns Instagram and WhatsApp under its rebranded parent company Meta, derives nearly all its revenue from advertising and collects at least eighty-two percent of all digital social advertising spending by businesses, with expectations that its market share will only increase. Facebook’s Digital Social Advertising (“DSA”) services are fueled by vast amounts of social behavioral data that Facebook collects from the PSN side of its platforms—which are free to users. This Note argues that in addition to the PSN market, Facebook also monopolizes the DSA market. Although these two markets are separate, dominance of both adds value to Facebook’s PSN and DSA products and contributes to the entrenchment of the company’s continued monopoly. Thus, to fully appreciate the company’s monopolization harms, Facebook should be held accountable for its monopolization of the DSA market.