Meta antitrust trial kicks off in federal court

It's fun to see everyone arguing about what "everyone" thought.. when... we can just... look... https://news.ycombinator.com/item?id=3817840 is a fun thread from 2012.

The top reply to the top comment has some useful quotes for the purposes of this discussion...

> This is not going to be one of the best tech acquisitions of the next decade.

> Instagram is a photo service in a sea of other photo services.

> Bookmark this comment. See you in 2022.

Heh.

HP bought palm for 1.2 billion dollars and then did nothing with it. Why is doing something anti competitive but doing nothing not? I’m sure there are other examples than the hp/palm situation.

> If it was some insignificant photo sharing app with 13 employees why did they pay a billion dollars for it? Everyone knew when the sale closed exactly what they were doing.

If everyone knew, why was the purchase allowed?

> “I didn’t mean to imply that we’d be buying them to prevent them from competing with us in any way,”

Isn't what matters in the end is whether there is still an effective market left as a result?

It seems that Mark himself is arguing that by the nature of the network effects of social media, first movers have a natural monopoly advantage that's hard to break.

The regulators should be focusing on that - ie enforcing rules which limit the monopoly advantage due to network effects.

Take the telecomms space - if somebody got first mover on a phone system and it wasn't interoperable with any others - then once established they would have a monopoly. The way you break that is to force interoperability - not allow companies to use access to the network as a competition barrier.

An example in the Meta space - as far as I can tell it was not possible for me to send a message to somebody in Whatsapp without going via whatsapp - ie there is no network access from a different app.

This appears to be exactly what the EU is focussed on - enforcing interop.

https://engineering.fb.com/2024/03/06/security/whatsapp-mess... https://en.wikipedia.org/wiki/Digital_Markets_Act

There must’ve been an attorney in that email thread who quickly reached out to him privately to make sure he added another sentence. That’s hilarious.

No. Mobile Camera Apps were a threat to non mobile first facebook. ("Instagram is a photo service in a sea of other photo services.")

Any one of them could have taken off and eaten facebook's lunch. Instagram was the winner in a sea of camera apps because facebook threw unlimited resources into the hip app of the moment.

If they bought both Instagram and Snapchat it would have been neutralizing competition. Instagram acquisition was just a business staying relevant after a youth market grew up and soured on them while the next younger ones wanted something else cooler designed for 100% around mobile.

I believe intention and behaviour matters much more to antitrust than simply continuing to be a dominant market leader by smartly staying on top of what the public wants. Google search doing horizontal integration into Android and Chrome to cut off competition's market entry points at lower levels is far more plausible antitrust narrative IMO.

It all bothers me. Centralization is bad. And if Facebook and Google wanted to just disable somebody's channel or pages, they could.

I think everybody on hackernews gets it. We're all pretty much on the same page.

Ain't nobody able to do anything about it though.

Meta's stuff gets a lot of attention because it's flashy and tied to social media drama, but the structural power of Amazon, YouTube, Apple, and Google is way scarier long-term. They're not just dominating products - they're controlling infrastructure. Distribution, discovery, monetization - the whole stack.

What’s surprising to me about the dominance of YouTube is the fact that 1) unlike all the social networks there is very little network effect with YouTube, and 2) there are perfectly to viable alternatively such as Vimeo that are routinely bypassed.

> I'm more concerned with YouTube owning all of social video. Movies are on a dozen streamers. Social stuff is on Instagram, TikTok, Reddit, and X. But video essays, independent animation, educational content, cultural critiques, music, video podcasts, trailers, gameplay, research, news - anything long form, serious, interesting - it's all trapped on YouTube as the only distribution platform. And they'll keep getting bigger with no possible alternative due to network effects.

Yes, but: despite all of us adblocking them, this is all supported by their ad revenue.

The discovery effect is simply too powerful. I can't really see a way out of this because people are not going to go back to paying for media. Possibly the only way is something like the increasing control of social media from the EU forcing a separate EU Youtube, which might include things like the French TV rules forcing a certain amount of content to be in French, plus control over foreign disinformation influencers.

(you know what the only other social video platforms are with millions of users? Bilibili, xiaohungshu etc.)

"Meta doesn't bother me too much."

it is concern for someone outside western hemisphere, in Asia especially META dominance is even stronger

I didn't know the FTC got involved in Afghanistan

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...

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?

I guess theZuck didn't donate enough to the campaign

Wasn't the FTC completely rebooted in 2021?

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.

Yeah, but we're talking about 2012. Instagram was small and wasn't making any money, and feature-wise it barely resembled what it is today. Going just by US sites in 2012 Twitter, Tumblr, Snapchat, Google+, Pinterest, YouTube, and Reddit were all large competing social networks (or social network adjacent sites/apps).

Seems like in your analogy there were plenty of grocery stores left.

There are far, far, far more than just 7 photo sharing apps/websites within the same number of clicks as Facebook and Instagram.

There weren’t only 3 social networks and they are not impossible to replicate (like cellular networks with limited spectrum).

Facebook knew that Instagram was up and coming and instead of competing, it just bought it.

You can read more about initial complaint and following the trial here: https://www.bigtechontrial.com/p/zuckerberg-on-the-stand-the...

The government has alleged that Meta's acquisition of WhatsApp and Instagram was done to reduce competition. Nothing has been established as anti-competitive or not yet, that's why it's in court. Evidence from both sides will be presented. I'm not sure how else to answer that question.

Buying a rising product to make sure you control it instead of needing to compete with it is not legal when you're the size of Facebook.

Usually you do that before the trial. Using that as the tactic is shady. Although this has always had the vibe of being about clamping down on big tech power not protecting upstarts. So the goals might be broader. A lever to pull through threats of more of this.

iMessage is not a business; it's just a messaging feature. There are no ads or 3rd party content or anything. The easy litmus test is the one I just gave; users generally don't use their real names on tiktok.

it's a matter of UI.

https://delta.chat/

It even has E2EE, as long as people use the same client (or a compatible one).

Plus, all carriers in Brazil exempts WhatsApp from data caps (zero-rating). They are working on remove other apps from zero-rating, but WhatsApp is harder to since it's synonymous to “messages” here and alternatives are expensive (SMS) or not as near widespread (Telegram is a far runner-up mostly used for its semi-public, huge groups).

https://news.ycombinator.com/item?id=43563574

https://news.ycombinator.com/item?id=43562320

https://news.ycombinator.com/item?id=32950204

If that's true then the downside to chilling acquisitions becomes... fewer "nice" things destined to rug-pull their users? Still not seeing the problem.

> Once they they get acquired, they quickly transition to the "squeeze every penny out of those users" phase

Instagram had less than a tenth of its current user base when it was bought [1].

[1] https://time.com/4299297/instagram-facebook-revenue/

Personally, I always liked things that never had an "acquire users" phase, or VC funding, but those things are less shiny (and frankly, less user-friendly.)

Gee if only there was a middle ground between these two extremes and the market somehow sought to achieve that state. Perhaps some simple market regulations might achieve this? And some enforcement of those regulations fairly and reasonably? Maybe a specific agency tasked with this?

That'd be more than fine with me, except the small internet competes for attention with the rest of the internet and gets slaughtered by their attention-sucking applications with shiny animations, spammy push notifications, gamification and manipulative FOMO-inducing tricks. This means that the "small internet" for any given niche is very, very small, even compared to what it would've been a long time ago on a vastly smaller internet.

User retention aside... Nobody can even find the small internet. It's out there and there are search engines, but even if Google magically wasn't utterly ruined by SEO SPAM, people just don't Google their special interests as much directly anymore. (I can tell from search analytics!) So aside from a struggle to keep users engaged in small communities, there's also not very many users entering smaller communities either, certainly not enough to counteract the bleed.

Sounds like someone just hasn't come up with the right app to act as an abstraction layer over the protocol.

> Discord is very much in the same boat of build user base, then either sell or lock people in and charge a lot. It's current model is unsustainable. It will get bought out or enshitify eventually, there's no other sustainable model unless every user starts handing them money every month like its Netflix.

I haven't looked at their financials, but I wouldn't be surprised if their current subscription offerings targeting power users were enough to support the service.

> People here used to know this, are we getting an eternal September? Comments are getting more and more "reddit" like.

What?! I do know this, and take great offense to the insinuation that my comment is "reddit"-like. I didn't feel it necessary to iterate over how VCware works since, as you said, everyone already gets that part.

Anyway, the "this place is getting more like Reddit by the day" thing has been a Hacker News staple for (well) over a decade too. Check the end of the HN guidelines, you'll have a chuckle.

Most of my favorite services are either foss based or owned privately with minimal VC.

I think maybe everyone should adjust their definition of success to include treating users fairly long term instead of milking them over prolonged enshittification periods.

Post-acquisition products can still dominate their market even if they have declining quality. E.g. they can be bundled with other offerings from the parent company. This is exactly the point of anti-trust.

Well in most cases you just ate your competition, so there's not a whole lot to care about.

The hardest part of competing with encumbants, especially when it comes to stuff like social media and IM, is acquiring users, due to those coveted network effects. When you look at what happened with Discord, it was able to swoop in when there was somewhat of a vacuum building with Microsoft-owned Skype being completely shit, MSN and AIM falling way out of fashion, and IRC... continuing to be IRC. Then they took advantage of something relatively new; they could lower the barrier to entry. Most existing IM networks required you to download a client to really use it, but Discord, just being a web app, you could log in from a browser and get the full experience. And if you needed to jump in quickly, you could literally just enter a name and start using it immediately, at least in the early days.

That doesn't happen often. What usually happens is the company that acquires the software makes use of the asset they actually care about (the users they just paid for) and now they don't have to do all of that hard work of actually acquiring the users by making a better product and marketing it. (Nevermind that they're almost certainly better-resourced to do that than the company that they are acquiring.) A large minority of users are very unhappy with the enshittification of the service, but most users don't really care much since they are pretty casual and a lot of them may not have even known things to be much better anyways. Microsoft squandering Skype seems to be the result of a lot of things at once, ranging from incompetence to the complexity that the P2P nature of Skype brought with it (at least early on.)

For example, look at Twitter. Elon Musk could do basically anything wrong but it has such a long history and so many users that it really is hard to squander it entirely, even after making many grossly unpopular moves. Don't get me wrong, Mastodon and Bluesky are doing fine, and it's also fine that neither of them are likely to ever really take over the number one spot in their niche; they still function just fine. But Twitter will always be the place where basically everything happens among them, even if the people who care the most absolutely hate the shit out of it.

I wish more acquisitions did go like Skype, only much faster.

I was too lazy to add an ellipsis. I was replying to the whole comment.

> The point is about why it's acceptable for the FTC to approve something, and then years later come back and change the decision.

I addressed that in my comment (it was the entire point of my comment, actually)

I hope so. When WhatsApp was acquired, they claimed that it would not be possible to cross-reference users between Facebook and WhatsApp. On both platforms users were required to provide a phone number. Cross-referencing users was trivial, and it's still amazing that this lie was accepted as truth at the time.

Correct. A promise is not legally binding unless there is some sort of payment in return. The exception is if you can prove you suffered monetary damages from relying on that promise, which is basically impossible for data sharing.