Entry Barriers: The Role Of Big Data In The Online Networking Market

Abstract

Section 2 of the Sherman Act requires the existence of market power. Entry barriers—impediments that foreclose the entry of new competitors and stifle the output of exiting competitors—are often used as decisive indicators of market power.

Facebook is recognized as the dominant player in the online networking market because it possesses a significant competitive advantage through its big data analysis capabilities. However, whether Facebook’s data advantage amounts to substantial entry barriers remains unclear.

To fill the gap in the existing literature on antitrust law, this Article explores entry barriers in the context of data analytics. Part II of this Article analyzes Facebook’s business model and its data analytics systems. This Article concludes that Facebook’s data advantages do not create substantial entry barriers in the online networking market. In fact, recent cases highlight that Facebook’s dominant position is actively challenged by emerging online networking platforms. These findings will guide antitrust authorities who must consider whether it is necessary to intervene in the online networking market.

Keywords: Entry Barriers, Market Power, Big Data, Online Networking Markets