Should the social media companies be considered monopolies?

Social Media
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Eamonn BrosnanAre big social media tech companies such as Google, Facebook and Twitter monopolies?

It’s a reasonable question since more and more they’ve come to control the public discussion of ideas.

But the answer is not nearly simple.

Based on active user counts, Facebook only has 36 per cent of the social network market share. But I suspect the vast majority of users of other social media platforms also have Facebook accounts.

So the real question is: What percentage of time do people spend on the various forms of social media?

Here, Facebook owns 83 per cent of users’ time.

Is Google a near monopoly as a search engine?

Most certainly. The competitors, combined, have a very minor share of searches compared to Google (July 2018 saw Google with 86.2 per cent of searches).

There’s really no metric by which Twitter can be considered a monopoly. It has fewer members than Facebook and fewer daily post totals. And people spend less time on their Twitter accounts than Facebook.

But the ideas expressed on Twitter might have an outsized influence. The tweet limit of 280 characters forces people to be concise and it’s easier to send messages out from a Twitter account than via Facebook. So, though there are fewer posts, more of them are important to the political and social discussions.

The definition of monopoly power, as defined by various U.S. courts, has best been summarized by the Third Circuit Court: “a market share between 75 per cent and 80 per cent 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 75 per cent. However, other circumstances must be present, such as evidence that the corporation has been able to use its position to block other entities from entering the market or to control prices of either their sales or their costs.

If a company such as Twitter doesn’t meet that threshold of market share, other factors could define it as a monopoly.

So if Google and Facebook are clearly monopolies, and if you can make the argument that Twitter holds an unhealthy majority as a venue to project ideas, why isn’t the matter of monopoly power straightforward?

Because Facebook doesn’t sell it social media activities, Google doesn’t sell its Internet searches and Twitter doesn’t sell its messaging activities. They all sell advertising and use their respective activities to draw users into their platform.

In 2017, Google had 38.6 per cent, Facebook 19.9 per cent and Twitter a paltry 1.3 per cent of the digital advertising market. And regardless of their market share of free services, it’s their revenue sources that are important when considering if they’re monopolies. They aren’t social media companies, they’re digital advertising companies.

The Eleventh Circuit Court stated, in another case: “market share at or less than 50 per cent is inadequate as a matter of law to constitute monopoly power.” The Seventh Circuit Court wrote: “50 per cent is below any accepted benchmark for inferring monopoly power from market share.”

This is where things get sticky. Google, Facebook and Twitter (along with several newer platforms) can, due to their dominance in the market, exert influence on people’s lives by prioritizing advertising and search results.

There’s overwhelming evidence that the Russian intelligence agency FSB exploited Facebook’s and Twitter’s algorithms and weak security to try to influence the U.S. federal election in 2016. Whether the effort had any discernible impact isn’t certain and would be difficult to assess.

Certainly, U.S. political parties and other domestic organizations used both platforms extensively to try to reach voters and energize their bases. These platforms have become intrinsic to our social discourse.

So there are lingering questions. How do we approach the seemingly indomitable control of social discourse and political discussion held by social media giants? And how do we regulate the marketplace of ideas without compromising free speech?

Eamonn Brosnan is a research associate with Frontier Centre for Public Policy.

Eamonn is a Troy Media Thought Leader. For interview requests, click here.

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By Eamonn Brosnan

Eamonn Brosnan is a research associate with the Frontier Centre for Public Policy.

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