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Is Facebook a natural monopoly?

By Scott Tibbs, August 24, 2018

Back in 2006, MySpace was the big dog of social media. I knew several friends and some family were on there, so I set up a profile there. A year later, MySpace went into cryostasis. A few years ago, I looked at the profiles of my old MySpace friends, and it looked like a time capsule to the summer of 2007. Why did MySpace go from the dominant force in social media to a failed company? Facebook opened up its platform to everyone in the spring of 2007, where previously you had to have an e-mail address ending in .edu to create a profile.

Facebook is a new company. It has only been around since 2004 and it has only been open to the public since 2007. Facebook is by no means guaranteed to be dominant forever.

The advantage Facebook has is that since there are a billion people on there, and 200 million users in these United States, it is more probable that someone you know is on Facebook than not. If you move to some other social network like MeWe or even try to recreate your decade-old MySpace profile, most of your friends will not be on there to share pictures and news. But Facebook's dominance now does not mean Facebook will always be dominant. Twenty years ago, the personal website was the big thing, before social media made it easier and more convenient to connect. Does anyone remember GeoCities?

One petition I saw likened Facebook to local phone companies, which had a built-in monopoly in their territories. But that is not a good analogy. In the 1990's and before, if you wanted phone service you had to sign up with a local phone company. You did not have a choice. (That is obviously not the case any more.) You do not have to sign up with Facebook to communicate with friends and family. There is Google Plus, there is Twitter, there is MeWe, and there is Gab. If you only have a few friends, you can invite them over there to set up private profiles or groups. You can even use good old fashioned email.

This is why calls to have government regulate Facebook need a better premise than the argument that Facebook is a "monopoly," because it is not a true monopoly. Plus, we risk a much more oppressive environment if we allow the government to regulate what must be permitted. That will inevitably devolve into government mandating what must not be permitted on the platform. As powerful as Facebook is, the best solution is competition, not government regulation. As more and more conservatives get frustrated with Facebook and leave for greener pastures, who knows? Facebook might be sitting next to MySpace in ten years.