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It was a potentially explosive announcement for social media marketing, but it would appear that for advertisers and marketers, who rely on social media platforms to connect with customers, the news barely received notice. The Federal Trade Commission (FTC) announced in December that they would be filing antitrust legislation against the largest social media platform in the world after regulators had become convinced the social-networking behemoth systematically sought to acquire or eliminate all of its competitors and engaged in unlawful tactics in order to become the most profitable digital services provider in the world. Facebook’s acquisition of Instagram and WhatsApp appears to be the final act that triggered the action by the FTC.
Social media platforms and other digital media venues have been receiving increasing amounts of advertising spend for years as consumers embraced the gadgetry and convenience of digital relationships. According to Emarsys, there are 3.2 billion daily social media users which translates to about 42% of the world’s population. In 2020, the total ad-spend on digital media topped $40 billion, a sum that is expected to reach $56 billion by 2022. Facebook represents as much as 80% of the social media spend. So why is there so little notice being given to an act that could significantly impact the whole of commerce?
Regulators are accusing Facebook of being an illegal monopoly, but proving the charge may be exceedingly difficult. The social media giant’s most valuable asset is data, and there has never been an antitrust suit brought against a company with a data product. In addition, the FTC will be required to show that a monopoly is harmful to consumers either through unfair, higher costs of services to consumers or from eliminating entry of new competitors into the marketplace. Regulators contend that “these transactions ultimately became part of a pattern of troubling, illegal behavior by Facebook to buy, bully or kill its rivals before they could siphon users and profits from the company’s core social service.”
The complexity of making a case and the length of time required to take Facebook apart may be a reason the potential action has yet to receive much concern from social media buyers and influencers. “Instagram is no longer viable outside of Facebook infrastructure. They spent six years moving things over,” said Dmitry Borodaenko, a former Facebook engineer who worked on Instagram infrastructure. “They just can’t undo it with a click of a button. It would take years.” The bad faith conduct appears to bolster the likelihood that the $800 billion social media giant will soon have a day of reckoning with the FTC. The outcome could have a dramatic impact not only on Facebook’s future but on the whole of big tech. It will be interesting to observe Facebook’s reaction going forward to see if they pivot from the goal of total market dominance and take a more careful posture as was demonstrated by Microsoft after its antitrust experience.
Perhaps the most appealing factor is the marketplace’s confidence in a competitive environment. Many believe that the coming year will see an expanding digital landscape as marketers embrace an omnichannel approach across all social and digital media platforms to deliver more personal and authentic content to a more finely targeted audience. Consumers who are becoming wary of the “big bully” antics of mega-tech providers will gravitate to less intrusive and imposing players who offer alternative solutions that better suit wants and needs.
The gratuitous chest-thumping being demonstrated by the big tech and social media monopolist may be ill-advised in the face of impending FTC actions and eroding favor of consumers. In the end, the most effective approach to reining in the abuses of grandeur may be robust and well-demonstrated gravitation towards alternative providers. With all the dynamic and disruptive factors of technology over the past decade, some things remain constant. It only takes a few minutes to surveil the landscape searching for other big and once iconic businesses that became comfortable with size and marketplace dominance. Where did so many of them go?