This podcast will acknowledge the ongoing issue with Facebook. Facebook, as well as other social media sites, dominate their market in a monopolistic way. Facebook currently uses its platform to push advertisements onto its consumers, which in return causes influence. This podcast will address this issue as well as the anti-trust laws that Facebook has violated.
Podcast by: Brianna Jones and Lloyd Ferguson
Kate: Hey everyone. Welcome to Oz-onomics, a podcast created for and by students in introductory economics classes at SUNY Oswego.
GABRIELLA: In this series, we'll have discussions about various economic principles and how they apply to our day to day lives.
KATE: Are you ready?
GABRIELLA: Let's go.
Hello and welcome to today’s podcast. My name is Brianna Jones. And my name is Lloyd Ferguson. Today we are going to focus on Facebook and its recent issues. This social media platform has been in hot water for quite some time now. They have violated anti-trust laws and have allowed interference with the previous election. Now we are looking at Facebook to determine if it is a monopoly. We are aware that a monopoly usually faces no competition and holds the top position in the market. However, among the younger generation, there are other social media sites that take their interest like Instagram, Twitter, and Snapchat. Facebook seems to be more reserved now for older adults. Although it may not seem like Facebook dominates over other social media sites, we have to look directly at the market aspects. Facebook and its creator are currently under investigation for “unlawfully using their market power”. We also have to keep in mind that although Facebook is our main focus, other companies like Amazon and Google are being considered as a monopoly. Individuals are able to create ads and different groups throughout the Facebook platform. Unfortunately, these same individuals are able to spread hate and violence. According to an article written on Quartz, “Facebook played a role in promoting hate because it is the main source of local information, essentially making up the internet there”. The there that is being discussed is Myanmar. The investigation into Facebook has proven difficult. The platform portrays monopolist tendencies, but according to certain laws, it cannot be proven definite. Facebook is also being investigated for violating anti-trust laws. We know that anti-trust laws and I quote are “a collection of federal and state government laws that regulates the conduct and organization of business corporations, generally to promote competition for the benefit of consumers”. Although it has been difficult to prove since Facebook provides a free service to consumers, there are been many claims against Facebook violating anti-trust laws. For example, Facebook attracted the many users it has today with the promise that they would provide the best quality of service. Consumers were promised the best quality in terms of their privacy. Consumers were led to believe that they would have the best protection when it came to their privacy. Facebook, however, uses third parties when collecting data and these third parties can use the data for any and everything. This is a violation. Users would leave the app or the site and it would follow. This means that these users were being surveillance outside of the platform. Third-party companies that were competing against Facebook were assisting with this surveillance. They were able to use them for ads where they would be reimbursed. These pop-ups and plugins that we see on Facebook from other companies are there to help promote their own services and content. Whenever someone clicked on it, these companies were able to gather more and more information about these consumers. In return, they sold the information to advertisers and made money in the end. Facebook was able to grow its power based on the lies that were given out to consumers and on the number of users they received. Facebook violates anti-trust laws and holds too much power. Since we are discussing the power Facebook holds, we must also address why people are still with the platform. Usually when an investigation is occurring, one would stay far away. So why does Facebook still have so many users? Individuals are still using Facebook for a few reasons. One, it has become a part of social norms. Social norms are very hard to get rid of, especially when hundreds and thousands of people partake in it. Two, network externalities. Network externality is the tendency of the value of certain types of products or services to increase as more people use them. The more people use Facebook, the more popular it becomes. People are more prone to follow the hype train. So, if something looks promising and has a large number of following, it is very possible that more and more people will join. This is similar to school clubs or the newest trend. So, just like a game of follow the leader, the more people who sign up for Facebook and use the platform, the more coverage it gets. The bigger it becomes. Facebook will continue to grow as long as the users keep coming. Thank you for joining us for this podcast. Bye
MICHAEL: There you have a folks on another edition of Oz-onomics, where economics becomes easier for Oswego students to understand where you get your money that you pay for your tuition worth. If you feel like being ahead of the curve, grab a seat, grab your phone, shift your fingers left and right. And download Oz-onomics on the podcast app. See you later.
The introduction to this podcast was provided by Kate Soanes and Gabriella Schaff. Michael Kolawale provided the outro. Music by Lobo Loco.