
FTC Gets Jurisdiction for Possible Facebook Antitrust Probe - JumpCrisscross
https://www.wsj.com/articles/ftc-to-examine-how-facebook-s-practices-affect-digital-competition-11559576731
======
JumpCrisscross
"In 2007, for example, Facebook introduced a program that recorded users’
activity on third-party sites and inserted it into the News Feed. Following
public outrage and a class-action lawsuit, Facebook ended the program. 'We’ve
made a lot of mistakes building this feature, but we’ve made even more with
how we’ve handled them,' Facebook’s chief executive, Mark Zuckerberg, wrote in
a public apology.

This sort of thing happened regularly for years. Facebook would try something
sneaky, users would object and Facebook would back off.

But then Facebook’s competition began to disappear. Facebook acquired
Instagram in 2012 and WhatsApp in 2014. Later in 2014, Google announced that
it would fold its social network Orkut. Emboldened by the decline of market
threats, Facebook revoked its users’ ability to vote on changes to its privacy
policies and then (almost simultaneously with Google’s exit from the social
media market) changed its privacy pact with users.

This is how Facebook usurped our privacy: with the help of its market
dominance. The price of using Facebook has stayed the same over the years
(it’s free to join and use), but the cost of using it, calculated in terms of
the amount of data that users now must provide, is an order of magnitude above
what it was when Facebook faced real competition."

[https://www.nytimes.com/2019/05/28/opinion/privacy-
antitrust...](https://www.nytimes.com/2019/05/28/opinion/privacy-antitrust-
facebook.html) _Why Privacy Is an Antitrust Issue_

~~~
will_brown
>The price of using Facebook has stayed the same over the years (it’s free to
join and use), but the cost of using it, calculated in terms of the amount of
data that users now must provide, is an order of magnitude above what it was
when Facebook faced real competition."

That’s actually a very interesting potential legal issue.

User/FB enter into agreement (user gets access to platform/FB gets access to
data), FB unilaterally changes terms of agreement (FB gets greater access to
user data, but User doesn’t get anything they didn’t already have)...seemingly
these modifications of the agreement should be void/unenforceable for lack of
consideration. Yes, the user may have agreed/consented to the changes of the
terms (by clicking accept, continuing to use the FB platform) but that doesn’t
mean the new agreement is enforceable without additional consideration from
FB.

~~~
JumpCrisscross
> _that doesn’t mean the new agreement is enforceable without additional
> consideration from FB_

Contracts can be re-negotiated for any legal or even no reason. Raising the
price without providing additional consideration is fair game if both parties
agree. And consumers have, overwhelmingly, agreed to the changes.

The question is whether Facebook abused its monopoly position to coerce its
users into said agreement. That's the author's gist, and based on the evidence
presented, it's a convincing argument.

~~~
will_brown
>Contracts can be re-negotiated for any legal or even no reason.

Yes, they can be renegotiated, they can not be unilaterally changed without
additional consideration (except limited circumstances: UCC, sale of goods,
etc...).

Continuation of use or even agreement to the unilateral change doesn’t matter
if their is no additional consideration, the new agreement is deemed
void/unenforceable.

~~~
joshuamorton
Does the facebook of today provide a remotely similar experience to the
facebook of 10 years ago? There's a lot of additional features that they've
added. There is, arguably, reasonable consideration.

~~~
will_brown
>Does the facebook of today provide a remotely similar experience to the
facebook of 10 years ago?

Yes.

It could certainly be argued as you say that the services changed - still from
a contract Law perspective these are unilateral changes by Facebook not
negotiated bargained for exchanges - but assuming there is consideration, over
the last 10 years do you really think FB materially changed the services to
justify each and every agreement modification? All you need is one
unenforceable modification along the way and the whole thing could unravel.

~~~
joshuamorton
I'm not a lawyer, and I'm admittedly taking a bit of a devil's advocate
position, but at the same time I also think that "reprocessing data requires
additional consideration" is a reach to begin with, so the counter-reach of
"new features are consideration" isn't completely insane.

I don't think there have been more than a handful of privacy policy
modifications from facebook in my memory (although I could be completely
wrong!) but if it really is, as I perceive it, ~once a year, I think the
argument that each year Facebook comes out with compelling enough features to
justify additional data collection is, perhaps unfortunately, justifiable.

~~~
will_brown
It would be interesting to see this legal arguement unfold with FB...I just
think the problem is FB unilaterally modifying the terms.

In other words FB saying we are going to now start providing you with X
services and you are going to give us Y data.

Sure the user might benefit from X, obviously even that could be argued, but
the idea is this isn’t a bargained for exchange/negotiation. This is
unilateral modification without consideration, it’s not enough for FB to say
they modified the data collection/rights which is justified because FB also
changed the service.

That’s like saying you ordered a cheese pizza for $10, the company
unilaterally charges you for $1,000 and justifies that because they bring you
100 pizzas...at no point was there consideration for the modification of the
agreement even though you got 100 pizzas. Similarly can FB just start
collecting more data/selling to third parties by unilaterally changing their
terms and justify it by saying a unilateral change in service equals legal
consideration?

~~~
joshuamorton
> That’s like saying you ordered a cheese pizza for $10, the company
> unilaterally charges you for $1,000 and justifies that because they bring
> you 100 pizzas...at no point was there consideration for the modification of
> the agreement even though you got 100 pizzas. Similarly can FB just start
> collecting more data/selling to third parties by unilaterally changing their
> terms and justify it by saying a unilateral change in service equals legal
> consideration?

I don't think this is quite a fair comparison. Let me rephrase it and tell me
if you still think its illegal (unethical, sure, but illegal):

You subscribe to a pizza delivery service that sends you 1 pizza a month for
$10/month. After a few years, they decide to up the minimum subscription to
100 pizzas a month for $1000 (or maybe even $500, there's probably some
reasonable economies of scale arguments to be made about FB). They send an
email notifying all customers of the ensuing upgrade, and a few months later
you start getting charged 50x more and getting a whole lot more pizza than you
want.

That's still probably not a good thing to do, and I wouldn't fault you for
calling FB shady if they did that. But I'm also not at all certain that that
action is illegal, especially from a strictly contract law perspective.

~~~
will_brown
It sounds very similar to the subscription radio case cited in the ABA article
I linked:

>in Knutson v. Sirius XM Radio, 771 F.3d 559 (9th Cir. 2014), the terms
regarding an automobile’s trial subscription to a satellite radio service were
sent to the owner a month after the purchase of the automobile in an envelope
marked “Welcome Kit.” The Ninth Circuit refused to enforce the additional
terms because there was no mutual assent to the terms. The Ninth Circuit found
no evidence that the purchaser of the automobile knew that he had purchased
anything from Sirius or was entering into a relationship with Sirius, let
alone had agreed to the terms (which contained an arbitration clause).
Therefore, continued use of the service by the purchaser did not manifest
assent to the terms.

Not exactly on point, and there are other such cases cited in the article that
support enforceability...but it’s all going to come down to nitty gritty facts
(for example another case found the terms of the change in price were buried
in page 4 of an invoice; therefore, unenforceable).

------
mdorazio
Good. FB's practice of "buy anyone who looks like they might become a
competitor" combined with its inherent dark patterns needs to be investigated.
I'm now waiting for an announcement regarding Amazon, which would round out
the list.

~~~
perpetualpatzer
Out of fairness, the DoJ reviewed both the Instagram [0] and WhatsApp [1]
acquisitions for competitive impact prior to acquisition completion as is
generally required for deals of this size [2].

It's not like the DoJ has been waiting on the sidelines unable to stop
Facebook from buying smaller companies. They looked at it and concluded it
wasn't an issue. Remember: the Instagram acquisition came ~1 yr after Google+
was launched and everyone was sure that Facebook was toast.

[0] [https://www.ftc.gov/news-events/press-
releases/2012/08/ftc-c...](https://www.ftc.gov/news-events/press-
releases/2012/08/ftc-closes-its-investigation-facebooks-proposed-acquisition)

[1] [https://www.ftc.gov/news-events/press-
releases/2014/04/ftc-n...](https://www.ftc.gov/news-events/press-
releases/2014/04/ftc-notifies-facebook-whatsapp-privacy-obligations-light-
proposed)

[2] [https://www.ftc.gov/enforcement/premerger-notification-
progr...](https://www.ftc.gov/enforcement/premerger-notification-program/hsr-
resources/steps-determining-whether-hsr-filing)

~~~
icebraining
> Google+ was launched and everyone was sure that Facebook was toast.

I think that was just your bubble :) The media coverage was decided lukewarm,
with "10 Reasons Facebook Will Wipe The Floor With Google+" (business
insider), "Why Google+ can never compete with Facebook" (NetworkWorld), "Why
Google+ won't hurt Facebook" (Gigaom). Slate actually declared "Google+ Is
Dead" in November 2011(!)

~~~
perpetualpatzer
That's fair. The hype cycle may have died down faster than I remember. Not a
big user of either service.

------
root_axis
Forcing Facebook to give up competitor platforms seems reasonable, but doesn't
really solve the problem of the _Facebook_ platform. We need to tackle
Facebook at a _cultural_ level or come up with laws that will protect privacy
from _all_ technology companies, not just Facebook.

~~~
kevmo
Let's start by breaking up Facebook.

~~~
colejohnson66
Breaking them up into what? It’s not like Google where you can break out the
search functionality from the maps.

~~~
kevmo
Here are at least 3 different companies:

Messenger (which was Beluga)

Oculus

Facebook

I'm pretty sure this message board can keep this list going.

------
beenBoutIT
A more sadistic Zuckerberg could play some preemptive hardball and
spontaneously take Facebook completely offline in the US for 24 hours replaced
with a message directing users to contact their state and local
representatives. How much pull does FB still have with Americans and do most
Americans like FB the way it is now ?

~~~
mdip
Very true ... when I read that I started thinking about the sorts of other
things an "Evil Zuckerberg"[0] could do. Maybe apply some of that research to
tweaking the news feed in a manner to manipulate the prosecution of the case
(I can think of a few general and specific ways that would be fun to expand
on, but it's late).

    
    
        > How much pull does FB still have ...
    

I've wondered that, myself. I quit 2 years ago. The funny thing is that a few
days after I quit Facebook, when people would ask me why I unfriended
them/other strange problem related to my quitting Facebook[1], I would say "I
quit Facebook". Somewhere between person five and ten, I got a snicker and I
looked back, confused. She explained that my tone was humorous because it was
more appropriate for quitting smoking or drinking. When I played back in my
head, I realized that she was right.

I didn't, though, have very strong feelings about Facebook. I had an
experience I can only describe as an apathetic-rage-quit -- I was talking to a
family member about something unrelated and mid-sentence, they say "Hey, what
was up with you not liking that [adorable picture of personal family event]
that I posted?" The next time I was behind a keyboard, I quit. I was, at one
point, a very happy Facebook user. Not customer, as in business-buying-
advertising, but user as in "the target demographic". It was a life-saver for
a service group that I ran, prior to this incident, twice a month[3].

The second that a member of my family invented a new obligation out of it --
and one, mind you, that I was at no fault for having failed on ... I had left
a long comment on a post by another, slightly more distant (but beloved)
family member, and my spurned family member was offended that the other post
came at almost the same time, therefore _I had to have seen it and ignored it
in favor of the other_. We had a legitimate, albeit small and unimportant
argument. It made me realize that a lot of the reason I scrolled Facebook was
habit mixed with obligation.

The thing is, I've told that story more times than I care to remember. Lately,
more people respond with "Oh yeah, me too", and if not that almost everyone
expresses some strongly negative opinion about Facebook -- normal, non-
tech/dev folks and geeks alike. Most of them have deactivated for extended
periods of time. It's crazy, but it sounds like cigarettes before the average
person knew about the lung-cancer risk -- lots of people who know it's bad for
them (plenty of symptoms), but can't fully articulate the reasons. And then
those who quit go on and on (like I am) about how nice it is to have the
freedom to "not be aware of crazy important event 4 miles across the state
that I should have known about because it was sent out to everyone on
Facebook" \-- "I don't subscribe to Facebook". Blank stare.

It'd be interesting to see a breakdown of who's leaving by all of those
incredibly detailed categories that Facebook knows about its users. It
wouldn't surprise me if quitting is higher among tech/dev (especially older)
and teenagers in general. My oldest is getting to that age and I have never
heard him talk nor have I been asked about Facebook. My kids friends don't ask
them to sign up and the vast majority of them do not have accounts[4]. Some of
the things their friends _do_ want them to have accounts on are owned by
Facebook, so figuring that out without Facebook's internal data would be
difficult.

[0] Lest this devolve into an "attack the billionaire-CEO", that was not my
intent. I have no opinion on Zuckerberg as a person; I just liked the way it
sounded (I was going to say that I thought it was more efficient, but that was
before the footnote with parenthesis...!)

[1] I've heard that my name or picture or both are missing from comments;
honestly not sure. After I quit, I haven't bothered to look.

[2] Reading it, now, it reads more like I quit _working_ at Facebook. I do not
work at Facebook nor am I seeking to do so. :)

[3] A ~130 member church group, almost all retired people when "feature
phones" would be more likely to be offered over smart phones for people who
are unable to understand how they are going to dial a phone with no number
buttons (but dialing with buttons makes sense?). Everybody had e-mail but
almost nobody checked it; why would they? And not a damn one of them is
reading or sending text messages on the nightmare phone that they rarely have
turned on, anyway. They had Facebook - and they were on that at least twice a
day. If I had to communicate something on short-notice, it worked so perfectly
that I stopped being concerned about following up that everyone received the
information.

[4] None of them are over 13; no parents know about that law and every kid
figures out how to solve that problem when it arises. Around 2012-2013 this
wasn't the case -- many parents allowed their children to have accounts and
many children wanted them.

    
    
        -:-:-:-:-:-:-:-:-:-
    

EDIT: I was writing this comment, sitting next to my wife in bed. I finish
posting it and she protests. She'd started reading it while I was finishing it
up and hadn't finished before I submitted. So I read it to her.

In what will now become my new favorite anecdote while participating in a
group-bitch-session about first-world-problems, my wife, who knows the details
behind this story, indicated that it looked _very_ obvious that it was her. It
was, in fact, not her or any member of my immediate family.

I think this is about as close as I can come on Hacker News to being shamed
for failing to comment on a cute family photo. And part of me wonders if my
wife will troll my comment history in fear that I have made similar blunders
(she will now!).

Prior to today, I couldn't imagine a world where my wife might actually _want_
a Hacker News account. After she reads this ... ?

:P

------
kerng
The stock market reacts accordingly, FB is down 8% at the moment. Considering
that Facebook should probably (from my naive standpoint) have not been allowed
to buy Instagram nor WhatsApp back in the day, it will be interesting to see
how this turns out.

------
Macross8299
It's pretty obvious that these probes aren't in good faith at all. If the
government gave a shit about antitrust law or consumers, we wouldn't see
things like Equifax/Transunion or Verizon/AT&T and other oligopolies that
currently exist in the states.

The government and both parties want more control over the internet and the
tech industry. Antitrust is a convenient trojan horse to get it.

------
tracker1
I find it interesting that most of the concerns are over privacy, which should
not be understated. I am quite a bit more concerned about freedom of speech as
platforms like Facebook and Twitter are increasingly censoring and
increasingly lopsided portion of the population, and often under very nebulous
circumstance. Yes, they've rolled back decisions after the backlash erupts,
but for every mistake they roll back, how many are never resolved?

Twitter has already been judged as effectively a public square by the supreme
court, and that politicians may not block the public. When do protections of
speech and press extend to what are effectively privately owned public spaces
as they do in the physical form?

------
neonate
[http://archive.is/lAjAH](http://archive.is/lAjAH)

------
busymom0
One of the recent examples of antitrust was Facebook announcing their own
dating platform. Considering all dating apps already used Facebook graph, FB
can easily take advantage of their power to kill other dating apps.

------
bitxbit
This is likely to end with Facebook divesting Instagram at the least. I think
it’d be interesting to see Systrom back in charge at Instagram.

~~~
nambit
[https://www.ftc.gov/news-events/press-
releases/2012/08/ftc-c...](https://www.ftc.gov/news-events/press-
releases/2012/08/ftc-closes-its-investigation-facebooks-proposed-acquisition)

------
thwythwy
Quick reminder that investigations don't do anything. Nor do they indicate a
higher likelihood of legal action, or success of actions initiated in Court.

~~~
rongenre
No, an investigation is necessary for legal action. Without, the likelihood is
0, with it's higher although clearly not a certainty.

------
beenBoutIT
Then what, eBay and Craigslist?

~~~
wise0wl
Both of them have reasonable competitors and are hardly anti-competitive. What
is your reasoning here?

~~~
Macross8299
The reasoning is that the lawmakers don't really give a shit about antitrust
or competitiveness of industries (because there are far worse monopolies to
target), just control over the internet.

