Should the Social Media Tech Companies be Considered Monopolies?

Commentary, Culture Wars, Eamonn Brosnan

The question has been asked, “Are the big tech companies, such as Google, Facebook, and Twitter, a monopoly?”. People have asked this question because we see more and more that they have come to control the dialogue and discussion of ideas on the public stage. And the answer is not nearly as simple as one would think.

Is Facebook a near monopoly as a social network entity? Based on actual active user counts, Facebook only has 36% of the market share. However, that doesn’t tell the real tale. I suspect that the vast majority of users of other social media platforms also have a Facebook account, so the real question to ask is “What percentage of time do people spend on the various forms of Social Media?” and here Facebook owns 83% of user’s time.

Is Google a near monopoly as a search engine? Most certainly. Though there are competitors, combined they have a very minor share of searches when compared to Google (July of 2018 saw Google with 86.2% of searches).

There is really no metric by which Twitter could be considered a Monopoly. They have fewer members than Facebook and fewer daily post totals. People spend less time on their Twitter accounts than Facebook as well. There might be an outsized influence of ideas expressed on Twitter, due to a confluence of factors; their Tweet limit of 280 characters forces people to be concise, and because it is easier to send messages out from a Twitter account to your followers than via Facebook. So, though there are fewer posts, more of them are important to the political and social discussions.

There is no formal legal definition, enshrined in law, of what market share constitutes a monopoly. Therefore, we are forced to look to the courts, who enforce decisions regarding this topic. The definition of monopoly power, as defined by various US Courts, can be best summarized by the Third Circuit Court “a market share between seventy-five percent and eighty percent of sales is more than adequate to establish a prima facie case of power.” Courts have found corporations guilty of holding monopoly power with less than seventy-five percent, though other circumstances must be present, such as evidence that the corporation has been able to use their position to block other entities from entering the market or to control prices of either their sales or their costs. If the company, such as Twitter, doesn’t meet that threshold of market share, there are other factors that could be used to define them as a monopoly.

So, I hear you cry, you have proven that both Google and Facebook are clearly monopolies in their respective industries, and perhaps we could make the argument that Twitter holds an unhealthy majority as a venue to project ideas to the masses. Why did you say this isn’t so simple at the start? Because Facebook doesn’t SELL their social media activities, Google doesn’t SELL their Internet Searches, and Twitter doesn’t SELL their messaging activities. They all sell advertising and use their respective activities to draw users into their platform. In 2017 Google owned 38.6%, Facebook 19.9%, and Twitter a paltry 1.3% of the digital advertising market. So, regardless of what market share of their free services that they provide, it is their revenue sources that are actually of any importance when considering if they are monopolies. They aren’t social media companies, they are digital advertising companies.

The Eleventh Circuit Court stated, in another case, “market share at or less than 50% is inadequate as a matter of law to constitute monopoly power” and the Seventh Circuit Court wrote “fifty percent is below any accepted benchmark for inferring monopoly power from market share”. And this is where things get sticky, Google, Facebook, and Twitter (along with several other, newer platforms) are able, due to their dominant and controlling share of the market, to exert influence on people’s lives by prioritising advertising and search results. There is overwhelming evidence that the Russian Intelligence agency, FSB, took advantage of the knowledge of Facebook’s and Twitter’s algorithms and weak security to attempt to influence the US Federal Election in 2016.

As to whether they had any discernible impact is not known for sure, and likely would be difficult to assess the results. The political parties, along with other domestic US-based organizations used both platforms extensively to try and reach more and more voters while also attempting to energize their respective bases, demonstrating that these platforms have become intrinsic to the functioning of our social discourse.

So, what we can see here is that from a business standpoint, these corporations are not monopolies. Regardless of what their non-income related activities might be, strictly-speaking they are digital advertising media companies, and as such own nowhere near the market share required to be tackled as a monopoly. So, how do we approach their seemingly indomitable control of the public forums of our social discourse and political discussions? Check back for Part 2 where we discuss Free Speech and regulating the marketplace of ideas.