Document Type

Article

Publication Date

Summer 7-1-2012

Abstract

Social networks are among the hottest phenomena on the Internet. Facebook eclipsed Google as the most visited website in both 2010 and 2011. Moreover, according to Nielsen estimates, as of the end of 2011 the average American spent nearly seven hours per month on Facebook, which is more time than they spent on Google, Yahoo!, YouTube, Microsoft, and Wikipedia combined. LinkedIn’s May 19, 2011 initial public offering (“IPO”) surpassed expectations, placing the value of the company at nearly $9 billion, and approximately a year later, its stock price had risen another 20 percent. Facebook followed suit a year later with an IPO that placed the value of the company at over $100 billion. Other social networking sites remain hot properties, and other Internet companies are struggling to catch up.

In what may be considered a rite of passage previously faced by such high-tech giants as IBM, AT&T, Microsoft, and most recently Google, social networking companies are now facing increasing scrutiny under the antitrust laws. Early private antitrust cases have begun to appear.

Anyone attempting to predict how the antitrust laws will apply to leading social networking providers must remember that a successful monopolization claim requires proof of two elements: (1) market power and (2) what is often called exclusionary conduct. This Article offers a few preliminary thoughts about whether leading social networking sites satisfy these requirements. Part I considers one of the most likely sources of market power: network effects. Part II evaluates whether a social network’s refusal to facilitate data portability can create an entry barrier and constitute exclusionary conduct. Part III examines Facebook, Inc. v. Power Ventures, Inc., which is a recent case that presented both of these issues

Comments

19 Geo. Mason L. Rev. 1147 (2012)