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Meta Platforms:Regulatory Environment: Difference between revisions
Meta Platforms:Regulatory Environment (view source)
Revision as of 17:38, 22 July 2024
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The Sherman Antitrust Act refers to a landmark U.S. law that banned businesses from colluding or merging to form a monopoly. Passed in 1890, the law prevented these groups from dictating, controlling, and manipulating prices in a particular market.<ref>https://www.britannica.com/topic/Miller-Tydings-Act-of-1937</ref><ref>https://www.investopedia.com/terms/s/sherman-antiturst-act.asp</ref> | The Sherman Antitrust Act refers to a landmark U.S. law that banned businesses from colluding or merging to form a monopoly. Passed in 1890, the law prevented these groups from dictating, controlling, and manipulating prices in a particular market.<ref>https://www.britannica.com/topic/Miller-Tydings-Act-of-1937</ref><ref>https://www.investopedia.com/terms/s/sherman-antiturst-act.asp</ref> | ||
* Section 1 outlaws "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations". This prohibition applies not only to formal cartels but also to any agreement to fix prices, limit industrial output, share markets, or exclude competition.<blockquote>“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.”</blockquote> | * '''Section 1''' outlaws "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations". This prohibition applies not only to formal cartels but also to any agreement to fix prices, limit industrial output, share markets, or exclude competition.<blockquote>“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.”</blockquote> | ||
* Section 2 prohibits "monopolizing, or attempting to monopolize, or combining or conspiring with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations" | * '''Section 2''' prohibits "monopolizing, or attempting to monopolize, or combining or conspiring with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations" | ||
<blockquote>“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.”</blockquote>For “monopolization,” plaintiffs have to prove that the defendant | <blockquote>“Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.”</blockquote>For “monopolization,” plaintiffs have to prove that the defendant | ||
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'''These two provisions, which constitute the heart of the Sherman Act, are enforceable by the U.S. Department of Justice through litigation in the federal courts'''. Firms found in violation of the act can be ordered dissolved by the courts, and injunctions to prohibit illegal practices can be issued. | '''These two provisions, which constitute the heart of the Sherman Act, are enforceable by the U.S. Department of Justice through litigation in the federal courts'''. Firms found in violation of the act can be ordered dissolved by the courts, and injunctions to prohibit illegal practices can be issued. | ||
==== '''Clayton Act''' ==== | |||
=== <big>Meta Case</big> === | === <big>Meta Case</big> === | ||
* Filing Date: The lawsuit was filed on December 8, 2020 (amended August 2021), by the FTC along with 46 states, the District of Columbia, and the territory of Guam.<ref>https://www.ftc.gov/system/files/documents/cases/ecf_75-1_ftc_v_facebook_public_redacted_fac.pdf</ref> | |||
* Allegations: The FTC alleges that Meta has established a monopoly in the social media market by acquiring potential competitors Instagram (for $1 billion in 2012) and WhatsApp (for $19 billion in 2014). The FTC argues that these acquisitions were part of a systematic strategy to eliminate threats to Meta's monopoly power, depriving consumers of alternative social media platforms that could have fostered competition. | |||
* Market Definition: The FTC contends that Meta's actions have prevented competition and innovation in the social media space, leading to higher prices and reduced choices for consumers. However, the initial complaint was dismissed in June 2021 for failing to adequately define the relevant market. The FTC was allowed to refile the lawsuit with an amended complaint, which survived Meta's motion to dismiss in January 2022. | |||
<u>Possible Laws Broken:</u> | |||
# '''Section 2 of the Sherman Act''': Prohibits monopolization or attempts to monopolize any part of interstate trade or commerce. | |||
# '''Section 7 of the Clayton Act''': Prohibits mergers and acquisitions where the effect may be substantially to lessen competition or tend to create a monopoly. | |||
<u>Consequences:</u> | |||
# '''Divestiture''': Meta could be forced to divest Instagram and WhatsApp, reversing the acquisitions. | |||
# '''Behavioral Remedies''': Meta might face restrictions on future acquisitions and changes to its business practices to promote fair competition. | |||
# '''Fines and Penalties''': Potential financial penalties could be imposed if Meta is found in violation of antitrust laws. | |||
# '''Precedent''': This case could set a significant precedent for future antitrust actions against large tech companies. | |||
=== <big>Past Cases</big> === | === <big>Past Cases</big> === | ||