Meta’s Monopoly & Multilayer Networks

“Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.” ― Edward Snowden

This article analyzes the technology and social media company Meta Platforms (formerly Facebook) which has acquired WhatsApp and Instagram among others. The thrust of this article suggests that Meta’s concentration of market power in the social media industry has led to ethical externalities of privacy violations and tangible monopolistic externalities, and that robust antitrust law enforcement is the optimal way forward as it effectively leverages profit incentives.

Key features of the industry

Neoclassical theory

The core assumptions of neoclassical theory are that individuals have rational preferences to decide outcomes, maximize utility, and have perfect information.

Rationality. Simon (1990) suggested that rationality is constrained by the information processing capabilities of people and the complexity in the constraints, implying that bounded rationality is a more reasonable assumption. The immediate gratification provided by Facebook via connectivity discounts the future cost of privacy violations e.g. identity theft (Xu et al, 2010), even in cases when individuals want to protect their privacy (Acquisti, 2004), causing them to register an account surrendering their personal data under Facebook’s privacy…