Survey: Ohio economists disagree on whether YouTube, Facebook operate as monopolies

By: - March 1, 2022 3:40 am

In this photo illustration, social media apps are seen on a mobile phone.(Photo by Chris McGrath/Getty Images)

Some social-media powerhouses have already come under fire in Ohio. Now a majority of a panel of Ohio economists says three of the biggest — Facebook, YouTube and Twitter — behave as such. But a significant slice of the panel disagreed.

The Buckeye State has long played an important role in the history of antitrust enforcement in the United States. A century-and-a-half ago Standard Oil, seen as the largest of abusers, was based in Cleveland as it used its corporate clout to get railroads to carry its products more cheaply than those of its competitors.

In 1887, Ohio took the lead in suing the energy giant as 29 other states followed. In federal litigation, government authorities produced evidence that the railroad discounts were illegal and that Standard blocked competitors’ access to pipelines, spied on other companies and bribed elected officials in order to cement its dominance.

All that, government officials argued, stifled competition and increased costs to consumers. In 1911, the U.S. Supreme Court upheld a lower-court ruling that Standard Oil illegally restrained trade and had to be broken up.

In the present day, Ohio Attorney General Dave Yost is arguing that social-media giants Google and Facebook have similar dominance in their sectors — although he’s expressed skepticism that they need to be broken up to correct the problems.

Yost said the companies unfairly advantage themselves through several gambits. In the case of Facebook, he said the company makes itself an all-encompassing net for people’s information, which it sells to advertisers.

“And that’s how they monetize their platform, is they sell that information to advertisers,” Yost told NPR in 2019. “But the integration of that from Facebook and its other platforms — when you think you’re going somewhere else  you want to leave Facebook and go to — what? Instagram? WhatsApp? Guess what? You’re still talking to Facebook.”

Yost and 47 other attorneys general filed an antitrust suit against Facebook, but a federal judge last month threw it out, saying it wasn’t timely. The case is being appealed.

In the Delaware County Court of Common Pleas, Yost is also suing Google, saying it’s using its dominance as a search engine to unfairly promote its own products and services.

“Google’s Results Page architecture is therefore designed to provide Google’s own products, services, and platforms with an advantage over providers of similar products, services, and platforms, in turn, also limiting traffic to non-Google sites,” the complaint says. “Google does not afford other providers with access to these enhanced features. As a result of Google’s self-preferencing Results-page architecture, nearly two-thirds of all Google searches in 2020 were completed without the user leaving Google-owned platforms.” 

That case is ongoing.

As it does, a panel of 30 Ohio economists were asked in a survey last week whether they agreed that “social media platforms like Facebook, YouTube, and Twitter operate as monopolies within their specific content area.” Eighteen of them agreed that they were, while nine disagreed and three were uncertain.

The comments they posted as they took the survey show genuine disagreement. Some argued that the rise of new platforms shows that the giants don’t have monopoly status.

“There are outlets all over the internet where like-minded individuals congregate and share their thoughts – everything from DIY chat boards, hobby groups, and politically minded groups,” Cort Rodet of Ohio University wrote. “Furthermore, the number of users on specific platforms fluctuates as preferences change. The most obvious example is the shift of younger users from Facebook to TikTok. If strict policies on opinion sharing turn off users, they can and will find a better outlet.”

One economist who agreed that YouTube, Facebook and Twitter are monopolies commented that she only did so because of the way the question was worded.

“I’m interpreting this statement as ‘Facebook operates as a monopoly within the market for Facebook,'” wrote Bethany Lemont, also of Ohio University. “Sure, that’s true, but it’s kind of silly to declare. We don’t say that ‘McDonald’s has a monopoly in the market for McDonald’s.'”

But Jonathan Andreas of University of Bluffton wrote that such arguments miss the big picture.

“Most of the disagreement here is about how different economists define ‘monopoly,'” he said. “We can all agree that these companies have considerable monopoly power which gives them vastly more influence over global society than any small businesses and (generate) much higher profit margins than the average small business. But literalists define ‘monopoly’ as a single-seller without competition and these platforms do compete with each other more like an oligopoly.”

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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.

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