Survey: Ohio economists disagree on whether YouTube and Facebook operate as monopolies

0

Some social media powerhouses have already come under fire in Ohio. Now, the majority of a panel of Ohio economists say three of the biggest — Facebook, YouTube and Twitter — behave like one. But a significant portion of the panel disagreed.

The Buckeye State has long played an important role in the history of antitrust enforcement in the United States. A century and a half ago, Standard Oil, considered the biggest abuser, was based in Cleveland because it used its commercial influence to get the railroads to transport its products more cheaply than those of its competitors.

In 1887, Ohio took the initiative to sue the energy giant as 29 other states followed. In federal litigation, government authorities produced evidence that railroad discounts were illegal and that Standard was blocking competitors’ access to pipelines, spying on other companies and bribing elected officials in order to consolidate its dominance.

According to government officials, all of this stifled competition and increased costs for consumers. In 1911, the United States Supreme Court upheld a lower court ruling that Standard Oil was unlawfully restraining trade and should be broken up.

These days, Ohio Attorney General Dave Yost argues social media giants Google and Facebook have similar dominance in their sectors – though he’s expressed skepticism they need to be broken up to correct the problems.

Yost said companies are unfairly advantaged through several schemes. In the case of Facebook, he said the company is building a global network for people’s information, which it sells to advertisers.

“And that’s how they monetize their platform is they sell that information to advertisers,” Yost says NPR in 2019. “But integrating that from Facebook and its other platforms — when you think you’re going somewhere else, you want to leave Facebook and go to — what? Instagram? WhatsApp ? Guess what? You’re still talking to Facebook.

Yost and 47 other attorneys general filed an antitrust lawsuit against Facebook, but a federal judge dismissed it last month, saying it was not timely. The case is be the subject of a call.

In the Delaware County Court of Common Pleas, Yost is also suing Google, claiming it uses its dominance as a search engine to unfairly promote its own products and services.

“Google’s results page architecture is therefore designed to provide Google’s own products, services and platforms an advantage over providers of similar products, services and platforms, which also limits traffic to sites other than Google,” the complaint states. “Google does not provide access to these enhanced features to other providers. Thanks to Google’s self-preferred results page architecture, nearly two-thirds of all Google searches in 2020 were completed without the user leaves Google-owned platforms.

This case is ongoing.

As it is, a panel of 30 Ohio economists was asked last week if they agreed that “Social media platforms like Facebook, YouTube, and Twitter operate as monopolies in their specific content domain. Eighteen of them agreed they were, while nine disagreed and three were unsure.

The comments they posted as they responded to the survey show genuine disagreement. Some have argued that the rise of new platforms shows that the giants do not have monopoly status.

“There are outlets all over the internet where like-minded people gather and share their thoughts — everything from DIY chat rooms, hobby groups, and politically minded groups,” Cort wrote. Rodet from Ohio University. “Furthermore, the number of users on specific platforms fluctuates as preferences change. The most obvious example is the shift of young users from Facebook to TikTok. If strict opinion-sharing policies discourage users, they can and will find a better outlet.

An economist who agreed that YouTube, Facebook and Twitter are monopolies said she only did so because of the way the question was worded.

“I interpret this statement as ‘Facebook operates as a monopoly in the Facebook marketplace,'” wrote Bethany Lemont, also of Ohio University. “Of course it’s true, but it’s a bit silly to state. We’re not saying “McDonald’s has a monopoly on the McDonald’s market”.

But Jonathan Andreas of the University of Bluffton wrote that such arguments miss the big picture.

“Most of the disagreements here are about how different economists define ‘monopoly,'” he said. “We can all agree that these companies have considerable monopoly power that gives them far more influence in global society than any small business and (generates) much higher profit margins than the average small business. But literalists define “monopoly” as a single seller with no competition and these platforms compete more like an oligopoly. »

Get morning headlines delivered to your inbox

Share.

Comments are closed.