GiD Report#174 — Facebook is a monopoly again

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GlobaliD

4 min readAug 24, 2021

Welcome to The GiD Report, a weekly newsletter that covers GlobaliD team and partner news, market perspectives, and industry analysis. You can check out last week’s report here.

This week:

The FTC is back w/its suit against Facebook
Facebook’s crypto push
Chart of the week
Stuff happens

1. The FTC is back with its suit against Facebook

The NYTimes:

“Facebook lacked the business acumen and technical talent to survive the transition to mobile,” Holly Vedova, the acting director of the bureau of competition at the agency, said in a statement. “After failing to compete with new innovators, Facebook illegally bought or buried them when their popularity became an existential threat.”
Facebook responded: “There was no valid claim that Facebook was a monopolist — and that has not changed. Our acquisitions of Instagram and WhatsApp were reviewed and cleared many years ago, and our platform policies were lawful.”

As the NYTimes report continues, this is one of Lina Khan’s first big tests after he judge dropped the initial case that’s since been resubmitted:

The F.T.C.’s core argument is that Facebook tried to maintain a monopoly over social networking through its acquisitions of Instagram in 2012 and WhatsApp in 2014. Slow to develop its app for mobile phones, the company sought to “buy or bury innovators threatening to out-compete Facebook in the new mobile environment,” the agency said in its complaint.
The lawsuit also says that, beginning in 2010, the company stifled competitors like Circle, a social network, and Vine, a short-video platform, by adding new limits for how outside developers whose products connected to Facebook could work with other social networks.
“Facebook beat competitors not by improving its own product but instead by imposing anticompetitive restrictions on developers,” according to the lawsuit.

Relevant:

2. In other Facebook news, their push into crypto continues

Facebook has had a rough go so far with their venture into crypto. Their initial Libra announcement sparked global regulatory scrutiny — eventually forcing them to water down the vision and rebrand as Diem, which has operated mostly under the radar.

Well, it looks like they’re back — starting with a new blog post on stablecoins from David Marcus (who leads Facebook’s financial services division).

Marcus acknowledges Facebook’s challenges thus far (Facebook’s brand equity and potential monopoly status likely don’t help its situation).

Here’s the NYTimes:

In recounting some of Facebook’s setbacks in trying to break into the crypto payments industry, Mr. Marcus describes the tech giant, the subject of antitrust inquiries around the world, as an underdog.
Facebook faces unfair resistance in the financial industry, he wrote. “I’ve heard multiple conversations about how this proposal would be so great if only Facebook wasn’t involved,” he said. “I understand and accept the need for extra scrutiny due to our scale.”
But Mr. Marcus describes Facebook as a “challenger in the payments industry,” with no specific plan yet to monetize use of the Novi wallet, which won’t charge for person-to-person payments, even across borders.

Relevant:

3. Chart of the week

It’s not a huge surprise why Facebook is itching to have a foot in the door.

Axios:

Total accounts tied to a bank account (shown above) jumped to 22.5 million — and over 60% of them traded cryptocurrency last quarter.
Crypto trading made up more than half of transaction-based revenue. (Compare that to 17% in the first three months of the year, per CNBC.)
And from Deloitte’s 2021 Blockchain Survey polling 1,280 global senior executives:

73% of respondents fear their organizations will lose competitive advantage if they fail to adopt blockchain and digital assets.
76% believe that the end of physical money is near, with digital assets replacing fiat currencies in the next five to 10 years.

GiD Report#174 — Facebook is a monopoly again

This week:

1. The FTC is back with its suit against Facebook

Relevant:

2. In other Facebook news, their push into crypto continues

Relevant:

3. Chart of the week

Relevant:

4. Stuff happens:

Written by GlobaliD