1. Comments on “Data-opoly” Prof. Matthew Sag Loyola University School of Law

2. What is the problem with big data? Data as the motive for exclusion Data as the means of exclusion Data as the means of leveraging from one market into another Unfair collection/use of data Consumer lock-in by increasing data switching costs

3. A CASE STUDY

4. 1984

5. 2016

6. Facebook (a case study in data-opoly?) 1.6 billion users 1 billion daily users, averaging 20 minutes each Facebook + sub-brands account for 30% of mobile internet use by Americans. $325 billion valuation

7. Facebook’s playbook Compelling/additive services Large user-base Selling the user-base to advertisers as an audience (not the data!)

8. Facebook’s markets Advertising (online/mobile) – significant but not dominant – E.g. in mobile Google 35%, Facebook 19% General purpose social networking – dominant (if that is the market) – Depends on the country – Not dominant in social networking writ large (competes with YouTube, Reddit, Twitter, Pinterest, Instagram, LinkedIn, Tumblr and Yelp)

9. Facebook is significant “There are three compulsory elements to online advertising today: you have to have a mobile website, and be involved with Google and Facebook,” Peter Stabler of Wells Fargo in Economist April 9, 2016

10. How Facebook stays ahead 1.Rich personal data – Friends, likes, interests, … “no other company, with the exception of Google, has as many users, knows as much about their behaviour online and can target them as effectively.” Economist April 9, 2016. 2.The data keeps getting better – Social login, messaging services, every changing privacy policy, mobile integration, messenger (now with chat-bots!) 3.Acquisitions keep the data flowing (and stop it flowing elsewhere) – Instagram, WhatsApp, Oculus, Onavo ~ $25 billion – Facebook even uses your data (through Onavo) to see which rivals it should buy!

11. Big data is key to Facebook’s success Is there anything wrong with that?

12. Four observations

13. Product changes and extensions not motivated by a desire to exclude can’t be antitrust violations – I.e., don’t be Microsoft Network effects are so great, overt acts of exclusion are probably unnecessary Consumer protection and data privacy laws are Facebook’s biggest constraint

14. Facebook’s acquisitions might be anticompetitive – Threat of rival social networks – “WhatsApp's growth is gobbling up user messaging and connection time that once could have belonged to Facebook. Now those users and their time do belong to Facebook. So buying WhatsApp allows Facebook to both own "the next Facebook" and prevent "the next Facebook" from eating Facebook's lunch.” Business Insider Feb. 20, 2014 – Deserve a close look – Not much to be done in hindsight – But there are product and talent synergies – Innovation through acquisition is important