June 26, 2022

AOC Wants to Ruin Facebook (And Some Republicans Want to Join Her)

The congresswoman’s push to ‘break up’ the company doesn’t actually address any of its problems.

It sometimes seems like Rep. Alexandria Ocasio-Cortez has never seen a company she doesn’t want to dismantle or a big government intervention into the market she doesn’t support. But when it comes to Facebook, some Republicans are foolish enough to agree with her.

Ocasio-Cortez just came out in favor of “breaking up” Meta. It owns not just Facebook, but also Instagram, WhatsApp, Oculus Virtual Reality, and other companies.

In an interview this week, Ocasio-Cortez endorsed using federal “antitrust” policies against the company. Antitrust laws are designed, theoretically, to break up monopolies and keep markets competitive.

Why does Ocasio-Cortez want to “break up” Facebook?

There are a few reasons. For one, the congresswoman simply finds the company objectionable in many ways and wants to lash out at it.

“When you look at a company like Facebook, and the completely corrosive ways that they have exercised an abuse, I believe, in civil society writ large — not just our democracies but … other countries — when we talk about production of vaccines or perhaps what we can do to … help them — they say … there are some things that the United States provide that are welcome,” she said. “There are also things that we want the United States to stop exporting, and one of those things is disinformation.”

(What a word salad that was!)

While some of Ocasio-Cortez’s critiques of Facebook have merit, nowhere does she explain how separating the platforms into different companies would make any difference.

Are we really supposed to believe that having Facebook and Instagram operating separately would stop false information from spreading? Or stop the “corrosive” effects these platforms can have on teenagers or society when overused?

There’s no reason to think it would.

After all, Instagram started as a separate company and had all of the same benefits and disadvantages. Its acquisition by Facebook has only changed the platform in minor, largely positive ways. These include allowing people to link their accounts and cross-publish on both platforms at the same time, as well as letting users connect with the audience they have on one platform on the other. What, exactly, would reversing this accomplish?

Ocasio-Cortez’s other argument for why Facebook needs “breaking up” is even weaker.

“They are acting as an advertiser, they are acting as both platform and vendor, they are … a communications platform, which has historically been a well-established domain of antitrust,” she said.

“Because they are so many businesses in one, the case is, I believe, right there in of itself as to why they should be subject to antitrust activity,” the congresswoman concluded.

What? Ocasio-Cortez is basically saying they’re doing a lot of things, and that’s bad … because reasons.

Facebook indeed does a wide variety of things. But it doesn’t have a “monopoly” on anything.

For social media, there’s everything from Twitter to TikTok to Snapchat to Reddit. For video content, there’s everything from Netflix to YouTube to Twitter to Rumble. For advertising and Facebook Marketplace, there’s Google and Amazon and so many other options.

What exactly does Facebook have a monopoly on? “Facebooking”? By that logic, every company with a somewhat unique product is a monopoly even if its services have plenty of competitors and potential substitutes.

It’s also not true that just being multi-faceted as a company is enough to justify antitrust action.

The U.S. uses a “consumer welfare” standard for antitrust. What this means is simple. Under this standard, you can’t just point to a monopoly or a company doing many things and say that justifies government intervention. You must show that the allegedly anticompetitive companies are using that market power to hurt consumers.

Facebook, Instagram, and WhatsApp are all free services used by hundreds of millions. Don’t forget that they charge most users nothing. Sure, there are legitimate censorship, bias, and privacy concerns with Facebook. But none of those are happening because it does advertising as well as being a vendor or because of the hypothetical monopoly it doesn’t even have.

Ocasio-Cortez’s push to “break up” Facebook is a bad policy solution that doesn’t actually address any of the problems with Big Tech.

It would only make services such as Facebook and Instagram, which millions rely on and benefit from, worse. After all, part of what makes Facebook so valuable for people is the fact that it can offer them everything from news to video to podcasts to a marketplace.

Breaking it all up would also restrict collaboration and divide up the companies’ resources. That’s a recipe for higher costs and more inefficiency.

Unfortunately, some Republicans actually agree with Ocasio-Cortez on this issue. For example, Rep. Madison Cawthorn and Sen. Josh Hawley have endorsed the idea of “breaking up” Facebook. So much for the free market, huh?

Punitively smashing Facebook into pieces for no real benefit is a dumb idea when Ocasio-Cortez puts it forward. But with her, it’s par for the course. When Republicans are signing on to such daft policy proposals, something is seriously off track.

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This article, AOC Wants to Ruin Facebook (And Some Republicans Want to Join Her), was originally published by the Foundation for Economic Education and appears here with permission.  Please support their mission.