In 1964, US Supreme Court Justice Potter Stewart said he could not define pornography but that he knew it when he saw it. In 2021, narrower criteria determine what counts as a monopoly. A federal judge has dismissed lawsuits alleging that Facebook attained and abused monopoly power.
The decisions show that competition law, which tends to focus narrowly on direct consumer detriment, is poorly adapted to deal with big tech. Businesses such as Facebook use network effects and data aggregation to indirectly extract large rents from consumers. Reform efforts have barely begun, allowing the tech giants to consolidate gains and bolster their share prices.
The US Federal Trade Commission and separately, state attorneys-general, had brought the cases. The FTC, the main trust buster for the US, argued that Facebook’s market share exceeded 60 per cent in “personal social networking services”. The judge ruled that figure was “too speculative and conclusory to go forward” and that this was “no ordinary or intuitive market”.