ZEW President Achim Wambach on Monopoly Lawsuit Against Facebook

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“Court Ruling a Setback for US Authorities”

A US court has dismissed the lawsuits against Facebook. The Federal Trade Commission and 40 US states had accused Facebook of having monopoly power in the social media market and wanted to force Facebook to reverse its acquisition of the image and video platform Instagram and the messenger service WhatsApp. Professor Achim Wambach, president of ZEW Mannheim and member of the German Monopolies Commission, comments as follows:

“This ruling is a setback for the US authorities. The court’s criticism that the authorities failed to prove its claim that Facebook has monopoly power in the social media market casts an unfavourable light on how this lawsuit was prepared. On the other hand, it also shows how difficult it is to clearly define markets in the modern digital economy to determine market power.

The European Union has gone its own way with its proposal for a Digital Markets Act (DMA). The DMA is aimed at so-called gatekeepers, which are defined by qualitative criteria such as a certain number of users. This eliminates the need to prove a dominant market position. Several obligations are imposed on these gatekeepers, such as better data portability, enabling interoperability and a ban on self-favouritism. This type of regulation of large digital corporations is also the result of lengthy and laborious competition proceedings against large platforms in Europe, which were only partially successful. This is exactly what the US authorities are now experiencing.”