Meta antitrust trial kicks off in federal court

If everyone indeed "knew at the time" then why did the FTC allow the acquisition to go through in a 5-0 vote?

This is what I don't get, the FTC is suing because the FTC allowed something to happen, when the platforms had even more dominance than they do now?

Kind of stinks of less than valid motivations based on the timing of bringing this up over a decade after the fact.

Partly our regulatory system unfortunately was timid and defanged and philosophically approving of a lot of mergers in general (neoliberalism + Laissez Fair Conservatives). The FTC didn't do the discovery to get the smoking gun email of Zuckerburg saying how he was doing the buyout specifically to "neutralize a potential competitor," (as The New York Times reported).

To anyone on the side of anti-trust, it was clear even without that email as to how much Instagram and WhatsApp were growing, and thus Facebook was Standard Oiling.

A move being anti-competitive and it being against anti-trust law are not the same thing. You also need to establish that the defendant is improperly exercising their own size/market-power to force the deal through which is a much higher bar.

Also the FTC is not exactly known for enforcing antitrust law very strictly.

I think "everyone" in this case means: people who knew the business and had an adversarial perception of Facebook's intentions. This was apparently not how the FTC thought at the time.

Hell, even I wasn't this cynical back in those days. I was shocked as late as 2018 when Facebook began using SMS phone numbers for advertising, something they'd promised not to do (for obvious reasons.) https://www.cbsnews.com/news/facebook-said-to-use-peoples-ph...

The combination of neoliberal laissez-faire economics along with how strongly tech supported President Obama's campaigns meant that the industry got to run amok for a decade. It's easily one of the biggest stains on his presidency in hindsight.

I guess theZuck didn't donate enough to the campaign

The trial has to go through in all cases of bribing:

- If I’m the politician, then I need to keep the company on the edge until the end of the trial where I promise them to be acquitted;

- If I’m the CEO, I need the trial to go through and acquit me, because it guarantees me against future trials.

> I need the trial to go through and acquit me, because it guarantees me against future trials

On substantially identical charges, where the principle of double jeopardy holds sway.

I've never had a Facebook account, other than a burner for the brief time I spent investigating VR via Oculus Quest 2.

I almost had one once, some time in the very early 2010s. After first login, the first prompt I saw was for my email account's authentication details, so that Facebook could "find my contacts for me."

I forget the exact language they used, but I know a boundary test when I see one, and I completed neither that nor any other further onboarding step, but immediately "deleted" the account - understanding this would not actually remove any information, but would deny me at least the temptation to develop what I could see would become a dangerous habit.

I don't exactly think I blame people who were slower to catch on, which is a relief, considering that appears at one time or another to have been about half the species and it would be a lot of work. But I would incline much less to say that mistrusting Facebook as early as 2018 would have been cynical, than that still to have trusted them so late seems remarkably naïve.

Something being predicted poorly, hypothetically, doesn’t mean you can’t rectify a past mistake, right?

Not specifically related to this case, necessarily, but if you let an acquisition go through and discover a decade later that it was, in fact, anticompetitive (and intentionally so), presumably you would still try to break up the resulting monopoly, even if you didn’t predict it would happen?

Mistake shouldn't be based on outcome. If Instagram failed, would they still have the antitrust case?

The government just kinda forgot that competition law existed for a few decades.

They were busy doing things like bringing freedom and democracy to Afghanistan, having a financial crisis, stuff like that. Very important stuff. Social media? Oh yes I think my grandson told me about that.

Take a look at the Alcoa case from 1945 [0]. The courts ruled that Alcoa was an illegal monopoly even though it acquired that status legally.

[0] https://en.m.wikipedia.org/wiki/United_States_v._Alcoa

At the time, Instagram had 80 million users, it had no monetization strategy and was profitless[1]. I suppose this made it seem less of an immediate competitive threat to Facebook's business model, especially with the presence of other smaller photo sharing platforms by Google etc.

In 2020, the Wall Street Journal reported that FTC officials in 2012 had concerns about the deal raising antitrust issues. However, they were apprehensive about potentially losing an antitrust case in court if they sued to block the deal.[2] If they would lose then on the merits of trying to enforce the Clayton Act, it would set a precedent that likely could not be undone.

[1] https://www.ibtimes.co.uk/facebook-instagram-deal-down-747m-...

[2] https://www.wsj.com/articles/tech-ceos-defend-operations-ahe...

I tried to answer that here: https://news.ycombinator.com/item?id=43686919

I didn't know the FTC got involved in Afghanistan

In the same jurisdiction*

FTC does what the public opinion expects them to do.

if you plan to steal something and get caught, you are guilty of planning to steal something, but you are not guilty of stealing it.

if you impulsively steal something and get caught, you are not guilty of planning to steal something, but you are guilty of stealing it.

monopoly is the same.

This court decision seems insane, being illegal because you work hard to become the best.

Being a monopoly is correctly illegal regardless of how that status was obtained.

Wasn't the FTC completely rebooted in 2021?

I remember hearing from friends at Facebook that an insider story was FB used VPN and in app IP address tracking to identify that instagram and whatsapp were hitting crazy growth metrics and that's how they knew they needed to buy them at all costs

Onavo was the vpn app turned competitive intelligence tool

That explains changes in priorities, but it does not make for great jurisprudence to have their unanimous decision revoked.

They could argue that the decision was made based on declarations that did not align with the private conversation that Zuckerberg had at the time, as those emails came out since.

Wow that would never happen now! Interesting how

A) that would be considered bad law now.

B) despite all branches of government going after Alcoa (Congress passing a special law to support the case mid way through), nothing happened upon remanding the case to the lower court due to the successful argument that other companies began competing

C) that would never happen now primarily due to only anticompetitive practices being scrutinized, not merely having the ability to control prices. But now I see where the confusion comes from, a 13 year saga in support of the Sherman Act

D) it’s so interesting how much the country changed solely from trying to differentiate itself from communism. So its gone to more of an extreme of private maximum extractable value.

Onavo, the VPN app-company that was repurposed by facebook for market intelligence, was only acquired in 2013, Instagram was acquired a year earlier in 2012.

But before 2013 there were methods on both iOS and Android for an App to get a list of all OTHER installed apps on the device.

Facebook had the means to know exactly at which rate each app was growing and how many of the users they have to share with it, the facebook app itself was gathering this info.

They could gather enough data to even calculate how much user-attention they lose after each app is installed on a users' device.

--

Onavo was then acquired in 2013, right when Apple started to lock-down those app-scanning methods with iOS7.

So it appears that the company was acquired to be able to KEEP doing something they have already been doing before that with the facebook app.

I can personally confirm that story.