The Regulation of Facebook, Google and Twitter

Oct 30, 2011, 10:08 ET from Center for Regulatory Effectiveness

WASHINGTON, Oct. 30, 2011 /PRNewswire/ -- Facebook, Google and Twitter operate in two-sided markets.

Consequently CRE believes the ultimate decision dealing with a governmental action directed toward any of the aforementioned companies should be based upon an in-depth examination of two-sided markets.

More specifically we are of the view that: whether a two-sided market behaves like a monopolistic market, a competitive one, or something altogether different depends in large part on the homing properties of its users; we are of the view that symmetric single homing markets exhibit monopolistic properties and asymmetric multi-homing markets come across very competitive.

If we are correct, then it is imperative that the FTC examine the unique properties of two-sided markets prior to initiating enforcement action in these markets. Failure to do so will bring about the dire consequences predicted by Professors Evans and  Schmalensse:

Antitrust analysis, tools, and techniques require modification when two-sided platforms account for a significant portion of supply. Failure to account for the consequences of interlinked demand between the two sides can lead antitrust analysis into serious error.

For these reasons we believe it imperative that the FTC conduct an open forum on two-sided markets to allow the public and stakeholders to express their views on this important matter.

The public is also encouraged to express their views on hosted by the Center for Regulatory Effectiveness, a Washington, DC based regulatory watchdog.

SOURCE Center for Regulatory Effectiveness