When Antitrust Met Facebook

Abstract:     
Social networks are among the most dynamic forces on the Internet, increasingly displacing search engines as the primary way that end users find content and garnering headlines for their controversial stock offerings. In what may be considered a high-technology rite of passage, social networking companies are now facing monopolization claims under the antitrust laws. This Article evaluates the likely success of these claims, identifying considerations in network economics that may mitigate a finding or market power and evaluating whether a social network’s refusal to facilitate data portability can constitute exclusionary conduct. It also analyzes two early private antitrust law cases against social networking sites: LiveUniverse v. MySpace and Facebook v. Power Ventures. These analytical considerations and early case underscore the importance of requiring that antitrust claims be asserted in terms of a coherent economic theory backed by empirical evidence. Permitting looser assertions of anticompetitive conduct risks protecting competitors instead of competition.

Number of Pages in PDF File: 17

Keywords: social media, Twitter, MySpace, network economic effects, market power, exclusionary conduct, gateways, adapters, data portability, privacy

JEL Classification: K21, L43, L81

Accepted Paper Series