It is not even close.
In this view (#expressyourunpopularopinion), I know that I find no agreement amongst my economist colleagues. Facebook is generally perceived to be a monopolist in something called the ‘social network market.’ The latest discussion of that comes in the Financial Times from Tim Harford. I rarely find myself in disagreement with Tim because he provides commentary that reflects consensus economic opinion. This time around I just happen to disagree with the consensus.
First things first, Tim Harford does not like Facebook. He really hates it. “It is easy to imagine a better social network than Facebook: more privacy, a slicker interface, and less fake news.” I, by contrast, love it. I don’t think it is easier to imagine a better social network than Facebook. It does incredibly well on all of these fronts. But that is not the argument I want to engage with here.
Facebook is the world’s largest news organisation. I said so in 2011 and it is more true today. But that is a different issue was to whether it has a monopoly on the news.
That is far from obvious. For that to be true, people have to get almost all of their news from Facebook. I, for one, gets lots of news from Facebook but it is hardly exclusive. On the social network side there is Twitter which looms larger for me. For my children, Snapchat does amazing things. But, in reality, my news comes from where it has always come from — traditional outlets like the Financial Times. Yes, many of these have seen drop-offs but that was happening long before Facebook and I have not seen any evidence that Facebook itself is driving any of that.
Think about it, we have a move to monopoly from nothing in just 13 years and no one has seen it in the data! The idea that Facebook has more than just market power in the market for news is laughable. The notion that it could be found to be a monopoly by even the most hawkish antitrust court is simply implausible. It is nowhere near the level of market power that would cause us to think about regulating it.
I have to say, however, that Facebook does have a near monopoly for me on news about my friends. In other words, it does control social news and so on that front there may be an issue. That is why thinking about social graph portability is not a bad idea. Because even if Facebook is good now, innovation in that space may be stifled from a lack of competition caused by network effects.
But please, enough with the “there is no alternative to Facebook for news” diatribes and let’s see some actual evidence because at a first pass, there ain’t no monopoly here.
[Disclaimer: I found Tim Harford’s piece through my Facebook feed.]