Response to the New York Times: No, Facebook is Not Like Ma Bell

Last week, the New York Times’ Editorial Board wrote an op-ed titled “Can Facebook Be Cut Down to Size?” In this editorial, they argued that Facebook has amassed market power greater than that of Ma Bell in the 1980s because of their large customer base and integration with third party software. The NYT editors appear to misunderstand that success and size are not sufficient to say that a business is engaged in illegal anti-competitive acts, and that barriers to competition in the social media market are radically different to those in the telecommunications industry.

If we are to have a conversation about competition in the social media market, it must be an honest one. To compare Facebook to Ma Bell is to fundamentally misunderstand the history of antitrust enforcement. Not only is social networking a non-essential service, it’s a market is full to the brim with competition. While many inaccurately label Facebook a monopoly, its list of competitors and alternatives is long and varied. Twitter, Pinterest, Tumblr, Reddit, Snapchat, Imgur, Kik, Telegam, Line, and Vimeo are but a selection of many successful companies that offer services similar to Facebook.

Social networking is simply not comparable to the infrastructure-heavy industry that is telecom. Facebook was started by Mark Zuckerberg while he was at college and required next to no capital investment to create. Ma Bell, on the other hand, required hundreds of millions of dollars before it could offer its services to the public.

Aspiring competitors to Facebook need do little more than create a website or app centered around an innovative idea. Competitors to Ma Bell, on the other hand, would have needed to amass millions of dollars in capital and spend years laying cables to even enter the market. Barriers to competition in the telecommunications infrastructure industry are enormous and entirely different in nature compared to barriers to competition for social media.

The next Facebook will likely be started in a dorm room. The next Ma Bell will not.