STOP Running Facebook Ads… (Facebook Antitrust Lawsuit)

so facebook is routinely being hit with a myriad of lawsuits from anyone and everyone in regards to the way that they operate their business right into, in regards to how much information they have on all their users, and all that type of stuff. however, just recently, they have been hit with their biggest lawsuit to date. you may have heard about it, you may have not, but in this video, i'm going to walk you through what the lawsuit entails, why you know the reasoning behind it and what it means for us as advertisers. you know, if you run an agency, you run your own e-commerce brands. you run you. you know, maybe you've got a local business that you run ads for, whatever. and i'm also going to go through exactly what it means for us as advertisers. whether you own your own- uh, social media marketing agency- like majority of you will- or maybe on your own e-commerce businesses, you own your own local businesses. whatever it is, i'm going to go through what it means for us as advertisers: whether we should stop running ads, keep running ads, what the course of action should be. now, guys, as always, just before we continue in the video, make sure you go ahead, smash the like button and subscribe to the channel massively, massively, massively helps out with the youtube algorithm. with that being said, let's jump straight into the video [Music]. so, essentially, the doj, the department of justike, announced that they have been hit with a lawsuit and they're being sued by the federal and state governments- almost i think i read a 46 states, as well as the, the federal government, are suing facebook. the reasoning behind it, okay, is because facebook apparently actioning on anti-competitive laws. so what that means is that, basically, anytime any competition rises towards facebook, they- they're, you know, they- put facebook in danger, quote-unquote. what facebook does essentially at that point is they either buy that company out or they'll just suppress that company and they'll essentially put them out of business by leveraging all of the power that they've got, right? and so what that does is it basically makes facebook a monopoly, which is seen as a huge, huge no-no in the eyes of the law, and so essentially, what that means that they're doing is that they're abusing their power. you know, they've got all this power and they're abusing it. at least this is in the eyes of the law, right. they're abusing all of that power and basically not, you know, not- having the, the customer's best interest at heart. that's what the law sees and that's why they've actioned on this lawsuit and essentially as well, you know what their, what their main goal is at coming out of this lawsuit, the reason for this lawsuit, in order for the- you know, the government to look at this lawsuit as a success at the end of it, that what they're looking for is basically wanting a restructure of the social networking marketplace because at the moment, again, in the eyes of the law, facebook is, you know. you know there's only one player, right, facebook owns instagram, facebook, obviously, and whatsapp, like, they're the three biggest players in social networking right now and facebook owns them all. so you know essentially what. what kind of stems from that is the fact that you know there's no competition. right, compete. competition is so, so good for the end consumer, right, you know? that's why you've got all of these different, um, you know supermarkets and shops and whatnot that all sell the same product. right, because it's good for the end consumer. because what kind of stems from competition is competitive pricing. right, each, each business wants to have the cheapest possible pricing so that they get more business, but you know, as a byproduct of that, the customer is very much benefited. then you've got, like you know, services- that the service itself is- is routinely getting better and better and better, because each business is trying to outdo the other out through their competitors and, again, a byproduct of that, the consumer wins. and also innovation as well. you know, each business is trying to innovate something new, bring something new to market or whatever that can help the customer- again, helping the customer genuinely in the best interest of the end consumer. now, what happens when one person, one company, one just behemoth owns everything? well, they control everything, they have all of the power and you know, one of the main reasons why facebook got hit with this lawsuit is because nobody can- no, nobody can- get near facebook. right, every time they try the facebook leave or buy them out or they'll just suppress them, as i said, with all of their power. and that is the real issue at the moment and that's why they've been hit with this lawsuit. so, essentially, what the government wants is a is a diversity of facebook's assets. so they actually want whatsapp, instagram, facebook itself. they're the three main ones, but they do have a multitude of others. you know all of their audience networks and whatnot. the government wants a diversity of those assets, which essentially means each one is going to become their own entity, which then obviously means that facebook doesn't have control over everything, which means there's going to be competition again, which means the end user, at the end of the day, is going to benefit more. so that's kind of the basis of the lawsuit. obviously it goes a lot deeper, but that's kind of the main takeaways from it. now, what does this mean as advertisers? does this mean that you should stop running ads? does this mean that you need to, um, start to really look at other mediums and whatnot? what does it mean for you as the advertiser? well, one thing you need to realize first things first is that this is going to be something that's going to happen over the next couple of years. right, something of this size like this is this lawsuit is the biggest of the generation. okay, this lawsuit is almost on the same level as the microsoft lawsuit, um, that they got hit with in 1998. now, if you know anything about it, you'll know just the severe size of that. right, this lawsuit is is on that same level. so anything of that size, right it's. it's not going to happen tomorrow, it's not going to happen in a couple of weeks, or even in the, you know, in six months time or whatever, right, but probably we're not even going to see too much of this, the effects of hap, of this happening until, you know, back end of 2021. okay, so that's the first thing you need to understand. you don't need to be all frantik and and freak out. you know, if you, if you run an agency, you run facebook ads for clients, you don't need to start, you know, transitioning your services tomorrow because facebook have been hit with this lawsuit. that's the first thing it's going to. you know it's going to evolve over a couple years. the other thing that i want to mention is that you know, i mean, we've seen this happen throughout the the last couple of years with facebook, right in, you know, in 2015, 2016, running ads on facebook was the easiest thing you could have ever done. okay, running out on facebook was the easiest thing you could have ever done. you literally had to click four buttons and you was getting a 10 row ads, okay. now, over the years, it's gradually gotten harder and harder and harder, and i personally look at this as something that is just kind of adding to that right, in three years, it's gonna get harder, and maybe this is the reason it's gonna get harder, but it's the same thing three years ago. right today it's much, much, much harder to run facebook ads effectively than it was three years ago, and so it's kind of just, like you know, a knock-on effect and it's something that you've got to realize and understand and expect. i'm almost looking at it as part of the process, now that you know it's not really fully rolled out yet, like kind of like the genuine height of this lawsuit and what's going to happen and whatnot, but i'm kind of just looking at it as a process. as i say, three years ago it was a much easier to run ads successfully than it is today and i know in three years it.

EU, U.K. Open First Antitrust Probe Into Facebook

eu- uk open first antitrust probe into facebook. facebook incorporated is facing its first in-depth probe by european regulators, the latest in a series of efforts to crack down on big tik market dominance across the continent. the european commission said it will investigate whether facebook misuses a trove of data gathered from advertisers to compete against them in classified ads. it will also check if the company unfairly ties its marketplace small ad service to the social network. at the same time, the uk said it was opening probes into facebook's marketplace and dating services, hours after germany's anti-trust watchdog announced a case targeting the google news showcase product. the cases open up yet another front for the world's biggest tik firms to fight on as regulators investigate their market power during a pandemic when online commerce and advertising has become far more important to people working from home. germany is already investigating facebook and amazoncom incorporated, while france is examining advertising practikes by google and apple incorporated. opening a formal probe means regulators can start building firm evidence of anti-trust violations, a process that can lead to a charge sheet or statement of objections and may eventually culminate in hefty fines, or in order to change the way a business operates. facebook briefly fell more than one percent in pre-market trading. the shares were down 1.53 to 324.51 at 7: 41 am in new york. friday's move by the eu is the first time it's escalated a case into facebook's behavior beyond the preliminary stages. it follows other high-profile cases targeting google, apple incorporated and amazoncom incorporated. the eu previously fined facebook for failing to provide correct information in the merger review of the whatsapp takeover. facebook collects vast troves of data on the activities of users of its social network and beyond, said marguerite vestager, the eu's competition chief. eu regulators will look in detail at whether this data gives facebook an undue competitive advantage, in partikular, on the online classified ads sector, where people buy and sell goods every day, she said online commerce has played an increasingly important part of facebook's business. during the pandemic, as more people are buying goods, online commerce ads continued to do very well and drive a meaningful amount of our overall business. facebook chief executive officer mark zuckerberg said on an earnings call in april. he said more than 1 billion people now visit facebook marketplace each month. facebook will continue to cooperate fully with the investigations to demonstrate that they are without merit. the company said in an emailed statement: we are always developing new and better services to meet evolving demand from people who use facebook. the uk's anti-trust regulator also opened its own probe into facebook data, looking at both marketplace and the dating service the company launched in europe last year. the competition and markets authority said it planned to investigate whether facebook abused its dominant position by collecting data from services, including its single sign-on option. the increasingly tik focused cma is running an independent investigation but said it will cooperate with the eu probe. the cma said its initial investigation, including information gathering, will run until february. germany's federal cartel office said friday that it's looking at the google news showcase to check if its terms offer unreasonable conditions to publishers. the move is latest in a series of assaults on big tik by germany's anti-trust chief, andreas munt. the eu investigation mirrors an earlier probe into amazon by looking at how a so-called digital platform may use data it gathers from companies that use its service to compete against them. the eu commission has been investigating facebook since 2019.. facebook sought to curb the probe with lawsuits last year to limit what information officials could scoop up you.

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Google Colluded With Facebook to Monopolize Online Advertising.

so when we tok about big tik, it's one of these things that almost sounds like a crazy conspiracy theory at first. to the people who aren't in the know it almost sounds like we're toking about the illuminati or some kind of secret society that controls everything in the world. and one of the things that i hear big tik skeptiks often say- meaning people that think big tik doesn't actually have a great deal of control over the internet- is the fact that big tik is made up of so many different companies. they're not all under one umbrella. it's not like we live in the mr robot universe, where it's just evil corp. we have amazon, google, facebook, twitter and apple, just to name a few. but what you need to understand is, even though these companies do have different ceos and different tax ids, they are constantly colluding with one another. they are constantly making backroom deals about how these few companies that you can barely count on your fingers and toes are going to divvy up control over the internet, because they realize that they basically have it. and as long as they can keep up this facade, this imaginary idea of competition, then they can keep on making billions and billions of dollars. so let's take a look at some examples of this collusion. this is a report about the ongoing antitrust lawsuit against google, and one example of an antitrust action on google's part is this thing that they call uh jedi, which is pretty much uh, just the code name for their plan to take over internet advertising, which they've already- pretty much already- done. like this isn't something that they're planning to do in the future. this is pretty much ancient history at this point. so the way that it all works is, uh, the ads that you see on various websites. these are paid for by different companies that are trying to get you to buy whatever product or service they're advertising, and the person that is running that website- whether it's like a blog or a news site or something like that- they're getting paid by the advertisers. usually that's how they uh maintain running the site, because it does cost money to run a website, or sometimes they're able to actually make a whole lot of money from it and do their full-time job if people really like the content that's there. now, these days, you usually don't go out to just one company at a time to get them to show ads on your site and then negotiate a price to do the advertising and everything with them directly. instead, you go through an ad exchange which acts as a middleman for many different companies that want to run ads for your site and they, you know, figure out what prices they're gonna do and obviously they skim a little bit off the top. now, google is one of these companies that people- many different companies- will go to uh wanting to sell their products and service, and so they'll pay them to show their ads. now, if you run a website that's showing ads, you probably don't really care too much what ad server or what ad exchange you're using to show those ads on your website. you just want to get paid as much as possible, meaning that obviously you want to serve ads that your audience is actually interested in. so, say, if you run a website about- i don't know, plumbing, you probably have a bunch of plumbers or, like diy people visiting your website. you know, maybe blue collard dudes. so you don't want to run ads for, maybe, like tiny anime cute backpacks. so you want to show as many ads as possible that are relevant and you want the ad server to offer a good pay-per-click rate- uh, for the ads, meaning, uh, however many people like you actually get paid a good amount for each person that clicks on that ad. now, it used to be that people would just go to the biggest ad exchanges like google and facebook to run all of their ads, and i guess that's because they assumed that they would get paid the most there, but of course, that isn't always the case. so eventually, this thing called header bidding was created, which is this process by which an auction is done in the background of the website you visit, between advertisers who are basically bidding to show ads for that browser session, and whoever bids the most gets their ad shown. so you, as the content creator, content publisher, you really get to maximize your profits in this way, because you're letting multiple ad exchanges- uh, fight out. you know, bid out who is going to pay the most. now, obviously, google didn't like this, because it turned out that other exchanges were actually willing to pay a lot more money, and content creators followed with the money. so google started losing market share there and they decided to first run a smear campaign against, uh, the header bidding tiknology itself, claiming that it will slow down your websites, uh, it's difficult to implement and that it could open up your website to getting hacked. of course, that isn't true if you set it up correctly. and once people started becoming unsure about header bidding, google then introduced this thing called open bidding, which they claimed was pretty much an improved version of header bidding that ran on google's servers instead of your own. so that should have been the first red flag there, but they said that, oh no, you want to do this so that you don't have to worry about it being set up wrong or, you know, getting hacked or anything like that. but what would you know? open bidding isn't actually fair. google will still rank themselves as the best ad exchange- uh, not all the time, because that would be pretty obvious, but a lot of the time, even when other exchanges were outbidding them. now. initially, facebook was actually in support of header bidding back in march of 2017, but then google came to them and offered advantages in their own ad marketplace, which was generating about 43 billion ad auctions for publishers- mobile app advertising- each month in the united states- so pretty big market that google has pretty much a monopoly over here. and as part of the agreement, these two companies also decided to work together to identify apple users, since apple was trying to provide some increased privacy to their users, at least when it comes to being tracked by companies that aren't apple. and this agreement was called jedi blue and it should have set off the alarms to anyone in the government about antitrust action, but it didn't. and that's just one example of antitrust action. there are more listed here in this series of tweets, like google's plan for project nero, which is a plan to turn the web into a walled garden that they called not owned but operated, or there's uh google willing to do almost anything to prevent people from circumventing- uh their ad exchanges. and there's also the thing about manifest v3 in chrome, where they're trying to basically kill off ad blockers to people that are using chrome. now, obviously, this isn't a problem if you're using firefox, but chrome still dominates the browser market share, so they're definitely going to be able to start showing more ads to people and get paid. well, they're obviously not going to pay content creators more, they're just going to keep more of that revenue for themselves. now, i know that this might just look like it's coming from someone on twitter, but if you're skeptikal about this or if you want to learn more about this, definitely take some time to look through this document, the 173 page antitrust litigation filing. i'll leave a link to it this pdf in the description of this video: uh, now how do we solve this problem? because i usually don't like to just blackpill you guys and then leave you with this stuff. i like to try to think of a solution now. the thing is, government regulation is probably not what you want. you really don't want the government to come in and try to fix this problem, because here's what they typically do. if google is in violation of antitrust law, the government can't just say google is now illegal. they have to legally define how google is being a monopoly and breaking these anti-trust laws and then make those actions illegal now perso.

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Google Offers to Change Ad Business to Fend Off Antitrust Suit | Tech News Briefing Podcast | WSJ

[Music]. this is your tik news briefing for tuesday, july 12th. i'm zoe thomas for the wall street journal. google's massive ad tik business has been the target of legal and anti-trust investigations for years. the alphabet-owned company has controlled a significant portion of the online ad market all along the chain. now sources say google has offered concessions in an attempt to head off a possible us anti-trust lawsuit. last week, the wall street journal exclusively reported the moves by google, a sign of just how intense pressure on the tik giant has become. joining us to discuss what google is offering and what it could mean for anti-trust concerns is our tik reporter, sam schechner. hi, sam, thanks for coming on the show. great to be here. so, sam, you've been speaking with people familiar with google's plans. what concessions is the company offering to make? well, according to at least one offer that the company has made to the us department of justike, the company would split parts of the business- its ad tik business that auctions and places ads and websites and apps into a separate company that's owned by umbrella. it wouldn't be an asset sale or a divestiture of those parts of that business, as some detractors have been asking for, but it would be a restructuring internally of how that business is operated and what would that mean for how google makes money off of ads? well, that is a great question and the honest answer is: we don't know, until we see the details, if this offer becomes something that actually goes into practike. we know that google plays a central role in the business of brokering ads across the internet. you know, advertisers are slated to spend more than 600 billion on digital ads worldwide this year and google's business brokering those ads accounted for about 12 percent of its total revenue of 31 billion dollars, or closer to 32 actually last year. so that's a huge business. so any changes they make to how that operates and any concessions they might make to, you know, give other companies a bigger share, that pi would be significant. are us regulators likely to accept this offer? well, what people familiar with the matter have told us is that antitrust officials in the us have a preference for deep structural changes, things like asset sales or divestitures, rather than promises to change business practikes- what are so-called behavioral remedies. so the fact that this wouldn't involve google selling parts of its ad tik business- and in fact google told us they have no plans to sell or exit this business- might make it a tougher sell to the doj. that remains to be seen. you know, google isn't only facing pressure, though, from us regulators. they're facing pressure globally. europe has raised concerns about its ad business. how are they receiving this news, and how is google dealing with concerns over in europe? well, you're right that concerns about google's role in advertising tiknology as a broker and auction house for digital ads, has raised concern in many jurisdictions around the world. that's something that not only is the us looking at, but the eu is also investigating it, as is the uk. the eu opened its investigation last year, and you know they've toked about the concerns they have that google might be preferencing its own business, and one of the big complaints that they've been looking into is that it's not possible to buy ads on youtube- one of the world's biggest online video platforms, if not the biggest- unless you use google's advertising tools, and so what people familiar with the matter have told us is that google has actually made an offer there as well, in which it would allow competitors to broker the sales of ads directly on youtube, and that could help address at least that part of the eu's investigation into google's advertising tiknology business. let's back up a bit, because you mentioned. you know just how large google's ad business has become, but how did it get so big and how are these concerns and the pressure on it been mounting over the last couple of years? well, you know, it's actually a long story, and if you tok to google detractors and some google competitors, they'd say the original sin is that antitrust officials allowed google to buy a company called doubleclick. they made an agreement to do that back in 2007 and the deal closed the following year, and doubleclick was a service that served ads to websites and used the data on those sites to serve those ads and also, you know, had an ad auctioning business, and that helped give google immense scale. and there's been a series of transactions like that that have helped the company build scale. and so the idea is that if you want to buy an ad on the internet- you know, on an app or on a website, you can use google tools to buy that ad, to place the buy if you're an ad buyer, and then those tools might seek out the ad and make a bid on an auction platform that's owned by google and the bid requests- the ads that are being auctioned on that platform- might be provided as well by a google tool that's then built into the app or website so they could control all of what's called the ad tik stack. now there are other companies that are involved in this kind of very complicated network of buying and selling ads within milliseconds across the internet, but the fact that google owns every step of that process has led to complaints- complaints that google rejects, but complaints that the company you know has a conflict of interest or maybe self-dealing or taking too big a share of online advertising profits. i mean, given how involved, how intertwined it is in all of those layers, are these concessions likely to change things for competitors or for customers significantly? that is the question that anti-trust enforcers are going to have to ask themselves as they prepare this lawsuit in the us. are google's offers and concessions on the table sufficient to address their concerns and will it make it a difference to the advertising ecosystem? or, by contrast, do they think it's not sufficient and do they want to take their chances fighting what could be a protracted court battle with no guarantee that they'll actually prevail at the end? all right, that's our reporter, sam schechner. thanks for breaking this down for us, sam, my pleasure, and that's it for today's tik news briefing. if you want more tik stories, check out our website wsjcom. and if you like our show, please rate and review it. you can do that wherever you get your podcasts. i'm zoe thomas for the wall street journal. thanks for listening. [Music] you.

Antitrust Problem: Risks Facing Google, Facebook, Amazon and Apple - Part 2 (Ep. 78)

hi, this is Dave. welcome to my channel. a few days ago, I released a video on Google. it was part 1. I'm kind of the bull case on Google going forward. however, in the past few days, as I've been researching for part 2 of this video, I've been looking at more of the risk factors for Google and my views on Google have changed over the past few days, and this is part of the process of researching and investing in companies. the big problem with Google, and with Amazon and Facebook and some others going forward, is the possible antitrust action the government's might take against these companies. in this video, I'm going to give kind of an overview on some of the risks I see and also I'm going to be answering some questions regarding Google from some viewers. hope you enjoy the video. Thanks, alright. so we have a possible antitrust problem here with Google and Facebook and Amazon and even possibly Apple, and a lot of times people tend to just take one angle. they say, oh, this is just a minor risk, forget it, it's not that important. and the other side, people say, oh my gosh, this is a huge risk and this is gonna wipe out all the companies, and I think there's something where there's the validity in both sides. however, we need a balanced look and we take a deeper dive into this issue, alright, so this is kind of a first look at this issue. now going forward, I think there could be much bigger, kind of deeper analysis regarding this. so, anyways, I want you guys to do your own research regarding this issue as well, alright? so a couple days ago, Wall Street Journal on Friday released an artikle saying the Justike Department and state attorney generals are likely to bring antitrust lawsuits against Google. now, this isn't the first time we've heard about this- and this was kind of the number one risk factor that I shared in my previous video- and Google. however, this story was actually kind of new in the sense that it's saying that the Justike Department is starting to kind of wrap up their investigation and they are going to proceed with antitrust action or a lawsuit. further, they're looking to get the state attorney generals on board, and 48 of them have already right initiated their investigations last year. so let's take a deeper look into what the story is all about. so the watch. The Wall Street Journal is saying that, yeah, the Justike Department and state your state attorneys will likely file antitrust lawsuits and the Justike Department might bring a case as soon as this summer. so it's already like May, right. so June, July, August, maybe within two or three months. so this is actually coming up pretty soon and they're saying at least some attorney generals are likely to file a case, probably in the fall, or they could join together in the Justike Department. they're saying that no final decisions have been made and is unclear whether an agreement could be rate can be reached right to settle this before it goes to court. now there's a lot of open factors here and they bring a different set of risks. this lawsuit could be among the most significant antitrust cases in US history, alongside the government's antitrust case against Microsoft in 1990s, and there could be a whole host of different outcomes for Google, but also for some of these other companies are being investigated. it could be a change of business practikes or it could be a breakup of the company. all right, The Wall Street Journal also said that last June they reported right, the Justike Department launching an antitrust investigation of Google and then a couple months later they expanded their antitrust investigation to Facebook, Amazon, Apple and Google. so they're investigating basically the big tik giants, right, and these companies in a lot of ways, have amazing business models, have great revenue and they're being investigated for different parts of their business and we're gonna look into some of the risks more. all right, the new york times later on, on friday as well, came up with the artikle saying that collaborating- basically a Wall Street Journal's artikle saying that, yeah, this is going to be joined perhaps with the just Justike Department and the State Attorney's. Google controls around ninety percent of the web searches globally and, yeah, in the past the US had investigated, let's say, from the FTC, and they didn't faced a Google didn't face any charges. but this time around it could be different. all right, let's take a deeper look and look at this risk factor from different. here we have big tik, or these big tik giants, as targets and back in July 23rd 2019, the US Department of Justike announced they're investigating the big for tik companies- Google, Facebook, Apple and Amazon- and I think over the past year, as this investigation has continued, there's actually increased politikal risk because the politikal environment in the us is becoming more polarized right and more extreme indifference in different ways. a few things. first, there's growing vitriol, or actually not just dissatisfaction, but I'm not dis complaining, but actually like real hate toward billionaires and to some of the big tik. further, you've got a politiks of scapegoating right on both sides of the aisle. people are scapegoating different people or groups of people or companies for problems that the whole country is facing, and this big tik is becoming one of the scapegoats and one of the main scapegoats. and then you've got a growing ideological movement against big tik. for example, I'm recently Elon Musk tweeted, replied to Robert Reich as an attack and basically this guy, Robert Reich, he's out of Berkeley as a professor. he used to be it, I think, the Secretary of Labor under Clinton- but he's been preaching a concept of ideology called socialism for the rich and harsh capitalism for the rest, and what he's saying is that for the rich, he's claiming that is socialism because the government keeps on bailing out the rich- right, these big companies- and they're these rich people have all their money right in these companies and they're getting bailed out and the rich don't have to worry. but for the rest of the people, the working class, he calls it harsh capitalism because they're not getting bailed out or as much as press the rich. and he's targeting a lot of the billionaires. he's targeting a lot of the big tik as part of the big problems and the corruption that supports big tik, and this movement, or these types of ideological movements, are gaining steam in the US and that's what makes this whole antitrust action or or risk actually even greater than just year ago. all right, in the past few months, we've been hit with the worldwide pandemic, and you would think that in this pandemic, big tik gets more goodwill because, for example, people rely on Amazon, more, they rely on Google and YouTube, and you would think that, oh, these antitrust lawsuits would just be tossed out or people wouldn't want them to happen. however, I think, in different ways, this whole crisis has highlighted some of the income disparity even more. right, you have Apple, you have Google, you have Facebook, you have Amazon, all these companies right, going back to their close to their all-time highs. and you're starting to see, like you know, with this pandemic, not all people are being hit equally right, those who are associated with tik, who have incomes- high incomes with that type of economy, are not, are doing pretty well, right, and so I think it highlights the that the income disparity, and actually could increase the discontentment, and then it just not only increases the discontentment, for you know, the income inequality, but these extreme ideologies right on both sides and lastly, I think I'm big tik- becomes an easy target because they have extremely high market cap. so you have these companies a trillion dollars or more in market cap and they really do have in some ways like great power and they look like monopolistik powers right where they control search or they control video or they can control social networking or control entire operating systems right on mobile devi.

Why is the government suing Facebook? FTC Antitrust lawsuit

this video is brought to you by our new investor finder. get weekly investor matches in your industry, your company stage and your location delivered to your email for free. sign up with the link in the description. when both the republican and democrat parties agree that you've gone too far, then you have, in fact, gone too far, and that is the case for facebook. the social media giant has had a volatile 2020 and now it faces not one, but two anti-trust lawsuits. authorities have accused facebook of breaking anti-trust laws and monopolizing social networks. the possible consequences of these lawsuits are enormous and they might change social media for good, but facebook is confident that they have done no wrong, have they? in this episode of forensics, we'll explain where both sides stand and what could happen in the future. how did we get to this? you might already know how facebook came to be. if you haven't, i recommend you check out our video on facebook. this video also explains some of the past controversy surrounding mark zuckerberg and his company. the thing is, in short: by 2012, facebook dominated the world of social media. it had a billion users and half of them logged into the network daily. around this time, facebook made the first of two major business moves. in 2012, it purchased- acquired instagram for one billion dollars and, from the outside looking in, it was a move that made sense because instagram was booming at the time and now facebook could expand its portfolio. then, in 2014, it purchased whatsapp for 19 billion dollars and the amount alone was enough to shock many, and with good reason. with these acquisitions, facebook now had the four most downloaded apps of the decade. zuckerberg now had a disruptor in instagram, efficient messaging service, and whatsapp, its own facebook messenger, and facebook, the world's biggest largest social network. by the way, those apps add a billion users each, and people, of course, were concerned. simply put, facebook was just too powerful. almost immediately, the mergers raised red flags all over the world. in the uk, the competitions and markets authority warned that the uk had to implement stricter rules on giants like facebook and google. the federal trade commission, or ftc, insisted that facebook and other giants like google had too much power, so they went on to work on investigating these companies. for 18 months, the ftc dug deep into facebook's operations and then they attacked. the lawsuits begin on december 9th 2020. both the ftc and several states sued facebook. the reason was simple: it was too powerful. there's much more than that. the ftc firmly believes that facebook has illegally maintained its monopoly through anti-competitive behavior. for the ftc, buying instagram and whatsapp was just part of the problem. facebook also cornered developers with restrictive conditions. many developers worked with facebook to connect their apps with its billions of subscribers, but at a cost. developers couldn't create software that competed with facebook, nor could their programs connect with other social networks. all of these actions, according to the ftc, gave facebook unprecedented profit. in 2019 alone, the company had more than 70 billion dollars in revenue and earnings of 18.5 billion dollars. why are there two lawsuits and not one? well, they're basically twin lawsuits, from the ftc and from state authorities. besides the ftc and the district of columbia, 46 states and territories, including, out of all places, guam, are involved, but up until this point, we've heard a lot from authorities. so what does facebook have to say in all of this? well, the reply has gone down two main paths. first, facebook says that the ftc approved these acquisitions back in the day, which is true. so facebook claims: why change their minds now? i guess it is a fair point. and then the second argument is that people choose to use facebook. they're not forced to use it. jennifer newstead, facebook's vp, sent out a statement that read: people and small businesses don't choose to use facebook's free services and advertising because they have to. they use them because our apps and services deliver the most value. we are going to vigorously defend people's ability to continue making that choice. she insists that, if this lawsuit goes forth, the government is sending a chilling warning that no sale is ever final again. true, well, not quite. and here's where things get complicated: the back and forth and compromising evidence. first of all, let's dissect facebook's appeal that the ftc approved the instagram and whatsapp deals. yes, they did, but there is a caveat. there's nothing in us merger law that says an agency's decision not to challenge a proposed deal immunizes that deal from future reviews. william kovacic told cnn- and he knows his stuff, he was a former chairman of the ftc- it seems that the ftc has the upper hand here. then there's facebook attitude all together. for many, facebook is just too powerful. it's buyer berry attitude is overwhelming. according to the bbc, letikia james, new york's attorney general, has said that for nearly a decade, facebook has used its dominance and monopoly power to crush smaller rivals and snuff out competition, all at the expense of everyday users. adding fuel to the fire, the ftc has produced several emails coming from zuckerberg himself and other members in leadership positions that show evidence of the company's relentless pursuit to eliminate all competition. zuckerberg knew they were lagging, especially against instagram. according to business insider, the ceo recognized that facebook would be left behind if they didn't stop instagram. in one email, zuckerberg told his cfo that buying instagram gave facebook time to react. within that time, if we incorporate the social mechanics they instagram were using, those new products won't get much traction since we already have their mechanics deployed at scale. the emails show that zuckerberg knew what the new significant threat was: whatsapp. whatsapp isn't precisely in the emails, obviously. instead, the controversial ceo recognized that messaging apps could become a springboard for more mobile and efficient social networks. aka a threat, and not just any threat. zuckerberg said this might be the biggest threat we've ever faced as a company. those are big words. so what's the solution? well, buy them, of course, but according to bloomberg, it wasn't just mergers. zuckerberg was ruthless in using facebook's power as an intimidation. when asked about the merger, former instagram ceo kevin systrom said: bottom line, i don't think we'll ever escape the wrath of mark. it just depends on how long we can avoid it. that's very. mark has said that it's all fair game. in an internal memo to his staff, he said our acquisitions of instagram and whatsapp have dramatikally improved those services and helped them reach many more people. we compete hard and we compete fairly, and i'm proud of that. and we haven't even gotten into the legal details. words of warning: yes, all the evidence is there: zuckerberg's emails, relentless aggressive attitude towards competitors and the company's ludicrous profit. it seems that the ftc has a solid case, but some experts say that it's anything but smooth sailing. according to the legal magazine arizona law review, business communications and anti-trust lawsuits are common and valid, but it has positives and negatives. these communications can provide valuable data for economic and business analysis. they also paint a general picture of the company that's under scrutiny, like facebook. but the use of business communications can also be inappropriate. anti-trust regulators might put too much weight on the language in these business communications, leaning too much on subjective perceptions, when the practike of antitrust laws should always remain rooted in economic analysis. a ceo's perspective might not be a clear reflection of reality. what happens if the subjective language is taken out of context? it's a valid question to consider. so is it the case with facebook and zuckerberg's e?