Three things the press keeps getting wrong about the Facebook antitrust case
This stuff is complicated which is why it is important to get it right.
BY TIM WU & SCOTT HEMPHILL
Law is complex and antitrust law is even more so. Nonetheless, the business and the tech press keeps making the following repeated errors in their coverage of the Facebook antitrust case:
1. Reporting that the Instagram and WhatsApp mergers were approved in 2012/2014 and discussing such “approvals” as if they are legally binding precedent
In 2012 and 2014, the FTC declined to take action against the acquisitions of Instagram and WhatsApp. As a legal matter — which matters, since we are speaking of a legal action — declining to take action has no binding effect on future enforcement actions. That is a well established principle not just in antitrust, but any area of law enforcement. Indeed, we applaud criminal prosecutors when they revisit cold cases with new evidence.
This is an important rule, because non-action might become action in the face of new evidence, and indeed that is what the FTC has in this case. In 2012, the durability of Facebook’s monopoly was unclear, and it was widely thought that Google+ would emerge as a major competitor to Facebook. But here in 2020 we know that the monopoly was durable, and that Google+ was not significant. Beyond that, more emails have come out, more third party testimony, and more evidence of a general, serial campaign to eliminate competitive threats, large and small. And the anticompetitive effects — less privacy, more ads, and so on — are now matters of fact rather than prediction.
It might be said that the FTC ought feel bound by its earlier non-action as a matter of institutional integrity, or something like that. Even if that were true, that’s very different than suggesting that the FTC’s non-action somehow serves as precedent, or even a reversal of “a decision to approve.”
And finally, even if the FTC should feel bound, nothing it did can be binding on the states, which are a separate authority unto themselves.