Antitrust and Social Networking

BY Spencer Weber Waller

IBM. AT&T. Microsoft. Intel. IBM (redux). Google. Twitter. Facebook. These firms all have been the subject of actual or rumored antitrust scrutiny over the past three decades. All are (or were) leaders in key high-tech sectors. All have been referred to as “monopolies” in the colloquial sense, and in the more technical antitrust sense, and each has been the target of public and private investigation and/or antitrust litigation relating to monopolization, attempted monopolization, or the abuse of a dominant position in the United States, the European Union, the E.U. member states, and other jurisdictions.

The goal of this Article is to create a framework to analyze the competition law concerns of social networking sites. It may well be too early to definitely resolve the many antitrust issues in this rapidly evolving market, but it is not too soon to begin to define the issues and analyze the way they will be resolved as antitrust law undertakes its traditional role of defining and limiting the abuse of market power in key high-tech industries. More generally, I seek to create an antitrust framework to understand and evaluate continuing issues of network effects, essential facilities, infrastructure, and their application to social networking sites, software platforms, and the interactive web. I also deal with the added complication that most of the markets in question do not currently charge consumers and exhibit features of what economists call two-sided markets. I conclude not with a call to action, but more of a checklist to look to in order to determine what issues matter most and which of our current market leaders have the greatest antitrust risks as online social networking continues to evolve and grow in importance.

DOWNLOAD PDF | 90 N.C. L. Rev.1771 (2012)