The Federal Trade Commission filed an antitrust complaint against Facebook on Dec. 9, 2020. The core of this complaint charged that Facebook used its market power to monopolize the social networking market and to charge excessively high rates to advertisers. On June 28, U.S. District Court Judge James Boasberg dismissed the complaint. He gave the FTC 30 days to attempt to amend the complaint and refile it. A bipartisan group of Senators and Congresspersons has now urged the FTC to refile the suit. The FTC should ignore the politicians and refrain from refiling the suit.
If, somehow, the FTC were to refile and win the lawsuit it would be socially counterproductive. The most intense complaints about Facebook center on content management, not on market monopolization and high ad rates to advertisers. This matters a lot because the remedy that the FTC was seeking in the antitrust complaint — divestiture of Instagram and WhatsApp — would likely make the successor companies worse at dealing with the content management challenges, including former President Trump’s access.
Many people, left, center, and right, are angry with Facebook. This anger, often quite justified, stems from Facebook’s sometimes bungled approach to content management over the past decade. These failures include Facebook being manipulated for bad ends. Facebook’s failure to catch the Myanmar military’s use of fake accounts to hunt down and capture pro democracy dissidents, and to stoke demand for ethnic cleansing appalled many people. Facebook’s failure to catch foreign governments’ use of fake accounts to spread lies and manipulate our politics and rend our social fabric also angers many. Philippine President Rodrigo Duterte’s dreadful misuse of Facebook in the Philippines was a total failure of management. Others are livid over the Cambridge Analytica debacle. And, of course, both left and right are dreadfully unhappy with Facebook’s approach to domestic political discussion. Everyone is unhappy.
Why will breaking up Facebook likely make things worse? In short, because content control can be done better by one large company than several smaller ones. Content management on a giant platform needs to be done partly by computer, using artificial intelligence and natural language processing to find problems. These techniques scale up beautifully. The more instances of questionable content that an AI algorithm gets to face and evaluate, the better its judgment will be in the future. Think of Google and its search algorithms; the principle is the same. In addition, because hate speech and manipulation are strongly rooted in local culture, finding the problems also requires real people who are fluent in language and culture. The management of such units also scales up.
At present, Facebook says that it uses a combination of employees and outside companies that provide the linguistic and cultural expertise needed to find troublesome content. This is extremely expensive, and Facebook will probably need to spend much more than it currently does. In addition, competitive pressures will likely reduce budgets for security for data. Further, a large company, with roots in many countries, will likely have the resources to resist political pressures engendered by an unhappy right-wing or left-wing part of the government and its supporters. For all these reasons, several small companies will likely do a worse job with content moderation than will one big one.
But doesn’t one big company also have pressures to allow only conforming, middle-of-the-road posts and discussions? No. If the one, big company is advertiser-supported and has many “channels,” it has incentives to provide something for everyone. That is Facebook. They have incentives to provide opportunities for everyone, left, right and center, to participate on Facebook, regardless of Mark Zuckerberg’s personal politics.
What should be done? Do the antitrust laws demand that the FTC refile this counterproductive complaint against Facebook? No. The circumstances of the original complaint — a razor thin majority to file the complaint during the lame duck period of a presidential administration — raise serious suspicions about the complaint’s quality. Reading the dismissed complaint confirms that it was, in fact, quite weak. In short, the FTC was seeking to redo the decisions it made years ago to allow Facebook to acquire Instagram and WhatsApp, based mainly on documents and theories that were available when they gave Facebook permission. That just will not do.
The FTC should drop this ill-considered antitrust complaint. Forcing Facebook to divest Instagram and WhatsApp will make content management worse, not better. It is time for the FTC to abandon its counterproductive strategy and refuse to refile the complaint. And we all need to continue to pressure Facebook to do a better job of content management.
Matthew L. Spitzer is Howard and Elizabeth Chapman Professor of Law and director of the Center for Law, Business, and Economics at Northwestern University.