Category: Business Competition

Alternatives to Using Amazon

Online shopping alternatives available while Amazon is pursued for monopolistic practices

Over the last three decades the retail side of Amazon has grown to where you can buy almost anything through them.  I have bought stuff through them and probably so have you.  While this one-stop shopping may be convenient for customers, it has the added effect of creating a monopoly—posing problems for smaller retailers, communities and even Amazon employees. 

Legal Challenge to Amazon

Small Business Rising, an online support organization for small businesses, is currently seeking signatures by small business owners/management for a petition to support an effort to reign in the breadth and depth of Amazon’s influence. 

Posted in May, 2026, on the website they state:

We’ve seen Amazon use their influence to skirt accountability before. This is a once-in-a-lifetime opportunity — we must show our support for this lawsuit and trial to discourage the FTC and states from backing down — either through settlement or dropping the case. Don’t let Amazon get away with a slap on the wrist.

Their effort stems from the Federal Trade Commission September 2023 lawsuit accusing Amazon with monopolistic practices.

The FTC position on its website begins as follows:

The Federal Trade Commission and 17 state attorneys general today sued Amazon.com, Inc. alleging that the online retail and technology company is a monopolist that uses a set of interlocking anticompetitive and unfair strategies to illegally maintain its monopoly power. The FTC and its state partners say Amazon’s actions allow it to stop rivals and sellers from lowering prices, degrade quality for shoppers, overcharge sellers, stifle innovation, and prevent rivals from fairly competing against Amazon.

In her December 20, 2019 article, New York Times columnist Karen Weise gives a background scenario in how Amazon puts the squeeze on the businesses that it contracts with on its website.

Alternatives to Amazon

In the meantime, this brings the question to the surface, “are there alternatives to Amazon when it comes to shopping online for a variety of product categories?” 

Several large retailers have opened their websites to third-party sellers, the latest being Best Buy.  A few months ago I was searching for a musical recording console and found one pictured under Macy’s.  Other retailers like Walmart, Target, Kohl’s and others have done it.  These items, like the console, are not sold in stores.  They are stored with the supplier and are shipped from them directly to the customer.

In this case, there is no fulfilment center, and thus can be a cheaper alternative than going the Amazon route.  Also, it means the land where a fulfillment center is built can be used for other purposes.  Communities are realizing this now with Big Tech data centers.

Customers also have alternatives available—perhaps with not as large a selection but also not as controversial.  An example is eBay.  Once again, items are shipped directly from the supplier.  Another is Etsy.  This site specializes in various handmade household items that can be monogrammed.

Rolling Stone magazine recently posted 21 Amazon Alternatives and what each focuses on.  The website GoodGoodGood also has an alternative list, including reasons why each is better than Amazon.

Radio Shack

Finally, if you are looking for electronics supplies there is…Radio Shack!  Seems like the retailer that was a go-to place in the 1970s-90s still exists online.  They once again sell only their own products.  And they have retail stores available—but with a twist.  They are located only in small towns and partner with local shop owners as resellers to sell their products.

Relevance Today of Adam Smith’s “The Wealth of Nations”

Smith’s book gives insight today into competition and monopolies.

The Book

The year 1776 brought forth our Declaration of Independence.  It was also the same year Adam Smith, an English professor of moral philosophy, published his book on economics of his day.  Officially entitled, “Inquiry into the Nature and Causes of The Wealth of Nations,” it is still in print and most copies run close to 1000 pages.

Smith wrote this in response to the behavior of the mercantilists of his day, whom he despised.  Mercantilists were business owners who favored government protection from foreign imports and pursued market domination.  He believed a country’s wealth should be based on the amount of consumption produced and not accumulation. 

He divides his work into five “Books”, each with multiple “chapters.”  Book I deals with the powers of labor, Book II focus on the role of stock, Book III on the opulence found in different nations, Book IV on the political economy and Book V on the role of the Sovereign.

What He Says

He describes many scenarios involving daily business dealings to prove points, but only in general terms.  In other words, he doesn’t mention any specific business by name and thus no case studies to independently verify.

At the end of chapter II of Book II he talks about the benefit of free competition vs. monopoly:

“By dividing the whole circulation into a greater number of parts, the failure of any one company, an accident which, in the course of things must sometimes happen, becomes of less consequence to the public.  This free competition too obliges all bankers to be more liberal in their dealings with their customers, lest their rivals carry them away.  In general, if any branch of trade or any division of labor be advantageous to the public, the freer and more general the competition, it will always be the more so.”

In chapter II of Book IV he argued that protectionism of home markets from foreign products may be counterproductive.

“To give the monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in all cases, be either a useless or hurtful regulation….It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.”

Smith mentions laborers but does not get into the area of worker organization, employee safety or what specific amount is considered fair wages.  He does mention that those who labor are also consumers, and as consumers should earn enough to provide adequate sustenance to contribute to the economy:

“No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.  It is but equity, besides, that they who feed, clothe and lodge the whole body of people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed and lodged.”

He believed that business should be allowed to pursue their own interest.  Government should not place itself in the position of favoring specific merchant classes.

“Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.  The sovereign is completely discharged from … the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of society.”

Conclusion

Adam Smith was of a different era in terms of commerce.  His generation did not have to deal with international corporations, labor unions, and Big Tech.  It is difficult to know what he would think of the influence of merger and acquisitions on commerce.  He did have to deal with monopolies, favoritism, and inequality.  In his book Smith covered a great deal of economic territory.  As a result, some can get lost trying to find a clear, concise message from it.  Today people with different economic views can find support from Smith.  Nevertheless, his work is still considered a pioneer in the history of economic thought.

Heard of the Robinson-Patman Act? If you spend money, you should.

Small retailers have a law to help them compete but is little used.

P

Have you noticed a considerable decline in local and regional retail businesses over the years?

Small groceries, pharmacies, hardware, music shops, bookstores have lost out to what we now call “Big Box”.

Some of this can be contributed to changing shopping tastes.  Big Box can offer the stock and breadth of products that smaller retailers cannot.  I admit that I go to Big Box for this reason.  Also, Big Box has a stronger online presence that some retail businesses have either not adapted well to or refuse to. 

Robinson-Patman Act

Local and regional retailers do have the support of the Robinson-Patman Act.  It was enacted in 1936 by Senator Joseph T. Robinson of Arkansas and Representative Wright Patman of Texas.  The Act was designed to restrict price discrimination by large suppliers and protect small retailers from national chain stores.  Suppliers could offer discounts to retailers who bought in bulk, but criteria had to be available to any retailer, without favoritism to individual ones.

The 1980’s saw enforcement begin to wane, as challenges to price discrimination began being seen as anti-competitive.  Businesses were allowed to violate either the law or the spirit of the law and get away with it.

Walmart and Pepsi Collusion

In late 2025 The Institute of Local Self Reliance sued the Federal Trade Commission (FTC) to make public censored details from the case involving PepsiCo and Walmart.  Brought by three Walmart customers, the suit alleged that PepsiCo was informing Walmart what other retailers were paying for the product and conspiring with Walmart’s knowledge to charge them a lower price, in keeping with Walmart’s well-known message of having lower prices.  The Trump Administration subsequently supported the decision by the current FTC to not pursue it any further.

Legislation

On March 19, 2026, Senator Chris Murphy of Connecticut filed in Congress the Fair Prices for Local Businesses Act.  In effect it would strengthen the Robinson-Patman act by eliminating loopholes that currently allow large companies from striking better deals with suppliers than their smaller rivals.  In other words, it would further codify as illegal the arrangement that occurred between Walmart and PepsiCo. 

Conclusion

One thing I advocate is strengthening anti-trust laws to allow for a greater definition of what anti-trust and anti-monopoly behavior is.  This can allow judges have better clarity as to what is in violation and what isn’t.  I support this law.  Equally important, it should go further and eliminate bulk discounts to large retailers.  Testimony from local and regional retailers on this would be welcome, and the media picks up on it as a priority. 

Contact your Senators and ask them to support this legislation.  At the same time ask them to support the Break Up Big Medicine Act, a bi-partisan legislation by Senators Hawley and Warren.  This targets Big Pharma and its acquisitions of health care companies and pharmacies.

 

 

Breaking Up is Hard to Do

Senate legislation introduced to target Pharmacy Benefit Managers

Neil Sedaka, a singer, songwriter, and pianist who died last week, hit the charts in the early 1960’s with the hit single, “Breaking Up is Hard to Do.”  He liked it so much that he released a newer version of it some 10 years later, with a slower tempo.

The Break Up Big Medicine Act

Senators Josh Hawley and Elizabeth Warren are looking to put that phrase to the test when it comes to going after Pharmacy Benefit Managers in the health care industry.

The act, officially titled, “The Break Up Big Medicine Act”, was released in February.  The bipartisan measure seeks to reign in the monopoly they feel exists with both prescription drug claims and prescription drug wholesalers, and the insurance companies, physician groups and pharmacists who are involved.

On their official website, Senator Warren is quoted as saying:

“There’s no question that massive health care companies have created layers of complexity to jack up the price of everything from prescription drugs to a visit to the doctor. The only way to make health care more affordable is to break up these health care conglomerates.  Our bill would be a monumental step towards ending the stranglehold that corporate giants have on our broken health care system.”

Senator Hawley says:

“Americans are paying more and more for healthcare while the quality of care gets worse and worse. In their quest to put profits over people, Big Pharma and the insurance companies continue to gobble up every independent healthcare provider and pharmacy they can find.  Working Americans deserve better. This bipartisan legislation is a massive step towards making healthcare affordable for every American.”

Pharmacy Benefit Managers

Pharmacy Benefit Managers (PBM), are companies hired by health plans to manage prescription drug benefits. Which drugs are covered, how much they cost, and where patients can fill prescriptions are determined.  Such things as to what pharmacies are “in network,” prior authorizations, and obtaining price discounts in exchange for favorable positioning are selected.  They started out mainly as an administrative service but grew in power to issue decisions in the daily operations of the pharmacy web.

The largest PBMs in the United States are CVS Caremark, Express Scripts, and Optum Rx. Together, they process nearly 80% of all U.S. prescription claims. 

The largest prescription drug wholesalers in the United States are McKesson, Cencora (formerly AmerisourceBergen), and Cardinal Health. They control over 90% of the U.S. drug‑distribution market.

On their website Warren and Hawley state the companies involved are “vertically integrated”.  This means one company can own or control every part of the health care supply chain—from health insurance companies and PBMs to pharmacists and physicians.

“By controlling both the company that pays for health care services (e.g., a health insurer) and also the entity that sets the prices for those health care services (e.g., a health care provider), these conglomerates may be steering business to their own affiliates, evading laws intended to rein in corporate profiteering, or using providers they employ to boost government payments and pad their bottom lines.”

Analysis

In my opinion this is an uphill fight for the two Senators.  Breaking up here is hard to do.  But it is a step in the right direction.  Legislation or court rulings can be part of the solution.  It is better than simply using social media to bad mouth corporations and their executives.  Social media is freedom of speech and can draw a lot of attention but leads to no solution.  It is also better than cheering on those who assassinate health care executives. 

The health care monopoly is bigger than pharmacy benefit managers.  For example, this legislation does not address its historical acquisition mania and the power it has produced.   Nevertheless, I encourage all of you to contact one or both of your U.S. Senators and express your support.  I am not sure it will garner the support, let alone the attention, of the Trump administration.  But, as I said, it is a step in the right direction.

 

 

What the F.T.C. Can Learn from Al Capone

F.T.C. needs broaden anti-trust laws to better insure convictions.

Al Capone

A century ago, gangster Al Capone was alleged to have been involved with prostitution, illegal gambling and murder, including the St. Valentine’s Day murder.

I say alleged, because Mr. Capone was tried but never convicted of any of the above.  In 1931 the Justice Department changed its strategy and convicted him of tax evasion.  He was given an 11-year sentence and was released early, in 1939.  His health subsequently declined and he died in 1947.

Had there not been laws on tax evasion that could land a person in jail, Mr. Capone may very well have continued his crime spree.

Failed Attempt

The New York Times reported on January 20, 2026 that the Federal Trade Commission (FTC) announced it will reopen its pursuit of anti-trust charges against Meta, parent of Facebook, regarding its acquisition of both Instagram and What’s App.

The judge in the original case, Judge James E. Boasberg, ruled that Meta did not violate anti-trust law with the two acquisitions. 

Judges should interpret the law and not legislate from the bench.  If Judge Boasberg believes that Meta did not violate anti-trust law with these acquisitions, it is important to know where in federal law he justifies his position.  The F.T.C. originally sought charges that the Sherman Anti-Trust Act of 1927 was violated.  Meta argued that it faces competition from apps like You Tube and Tik Tok. 

There is a video on YouTube from 2010 where Mark Zuckerberg states at a company address that Facebook does not acquire companies for the company itself, but to acquire the individual or individuals behind it.  In other words, he explained this as his method of acquiring top talent.  However, as a result, the companies these people started, all tech companies, simply disappeared.  Nice way to quietly get rid of any rising competition, isn’t it? 

Analysis

If the F.T.C. is serious about revisiting this, the people there really need to look at why they lost the first time.  If they apply the same evidence, they may get a similar result, even if ruled by a different judge.  Perhaps looking at Meta’s (previously Facebook) ENTIRE acquisition history may provide additional evidence of anti-trust, monopolistic behavior.  If they feel they still have a weak case, perhaps amending federal law to provide them with a wider net would bring Meta, and possibly others, to justice. 

Hostile Takeovers – How to Cease Hostilities

Businesses need help from wasting time and money on this.

In the News

Paramount continues to pursue Warner Brothers Discovery, though management has clearly indicated the Netflix deal is in the company’s best interest.

At the same time, Cincinnati based Cintas Corporation has announced a third attempt to acquire Massachusetts-based UniFirst.  Both companies provide employee uniforms and related services but in separate parts of the country.

What is the link between the two?  They both involve using the tactic known as the hostile takeover.

Definition

A hostile takeover is an acquiring company seeking to obtain control of another company, often a competitor, against the recommendation of either senior management or the board of directors.  The pursuer will sometimes appeal to the shareholders directly to force a vote on the bid. 

This tactic was used by Standard Oil Company to acquire refineries a century ago.  Since the Depression it was rarely used until the 1980s.  The Reagan administration pursued deregulation, which led to a different, and sometimes aggressive, approach to corporate governance. 

Anheuser-Busch

One that made headlines in 2008 was the acquisition of Anheuser Busch by Belgian-based InBev.  It is now known as AB-InBev, which is now the world’s largest brewer.  By the way, it was the world’s largest brewer PRIOR to the acquisition.  During negotiations InBev promised not to close any breweries, but it did not promise to maintain current employees.  As a result, some 1,400 jobs were eliminated—jobs perfectly legitimate one day were now gone the next day.

Analysis

In my opinion, hostile takeovers deviate far from the founding principle of capitalism.  That principle is having an idea for a product and service and acting on it in an environment where those ideas can become real and make a profit.  Having to battle competition is also part of this principle.  Hostile takeovers are nothing more than a power grab meant to either dominate the market or specific companies.

Some may argue that they are pursuing growth.  They also argue that some companies are bloated and inefficient and an outsider needs to come in and straighten things up.  Nothing wrong with pursuing growth.  But growth can (and should primarily) be pursued through internal research and development.  As for inefficiencies, some companies may have them.  But they should be urged to change through persuasion rather than bullying tactics.  Some may not change, and they may fail.  Business failure is also a principle of a capitalist economy.

How to stop this

Some pursued companies have adopted tactics known as a “poison pill,” meant to provide roadblocks.  An example would be issuing additional shares to existing shareholders, thus making it difficult for the acquirer to obtain a majority stake.

The federal government could also create a law that would allow the victim to declare a hostile takeover has been pursued.  The aggressor would then be prohibited by law from making any further attempt to acquire the other.  If the victim does not declare, the pursuit may continue.  This would allow the pursued to keep its resources and not waste either time or money with lawyers to try and fend it off. 

Does this make sense? 

Should this not be pursued?

The Victor May Now Be the Vanquished

Why is Warner Brothers for sale at all?

David Dayden, executive editor of The American Prospect, raises a question on the website, “Why is Warner Brothers For Sale At All?”

I have been wondering the same thing.

The Irony of it All

Dayden answers his own question by saying,

“The simplest answer for why Warner Bros. wants a merger is to cover for other failed mergers….These mergers created a horrific financial legacy: “$53 billion in debt as of 2022.”

He also lists the acquisitions that have led to the debt, including Time Magazine, America Online (AOL), Time Warner then being bought by AT&T, and Discovery Media.

What is ironic here is that Warner Bros. Discovery finds itself now as a victim of its own previous acquisition frenzy.

He adds that Warner recently received Golden Globe nominations for the films “One Battle After Another,” and “Sinners.”  Also for the television series “The White Lion.”  So it’s not like the company is in a downward spiral with new releases.

Dayden ends his article promoting separate companies between production and distribution. 

What to Do

Why is Warner Brothers for sale at all? In this case, because there are more than one potential buyers. As far as I know it was not looking for a buyer. And each buyer feels confident that another big dollar acquisition will get approved by regulators.

In this chess game I have yet to read about what employees think of all this.  Nor is there any input from customers. 

IMO, federal anti-monopoly, anti-trust law violations should include a buyer’s acquisition history, including input from both employees and customers.  Have previous acquisitions resulted in immediate mass layoffs?  Is there documented evidence of customer dissatisfaction with either the product or service?  Has money been invested in the acquisition or has it been ignored and left to die on the vine?  Violations of these should also be codified to give judges broader reason for denying an acquisition.   A company dying resulting from an acquisition is not in the best interests of our nation as a whole.  This should be a bigger priority than one company’s private benefit.

SKYDANCE-PARAMOUNT Merger – More than Just News

A chess match with big players and high stakes, but employees may suffer.

The proposed acquisition between Skydance and National Amusements Inc., the parent company of Paramount, is a boardroom chess match with multiple players and multiple outcomes.

Paramount is owned by the parent company National Amusement, of which Sheri Redstone owns a majority percentage of voting stock.  They operate such networks as BET, MTV, Nickelodeon and Paramount Films.  It is also the parent of the CBS television network, which includes CBS News.  Skydance was founded in 2010 by David Ellison.  Its claims to fame have been producing “Top Gun: Maverick” and “Mission Impossible—Ghost Protocol.”

THE DEAL

According to Cord Cutters website, here are the details of the deal:

The Skydance-Paramount deal, with an enterprise value pegged at $28 billion, promises a major shakeup in the media landscape. Skydance Media, LLC, valued at $4.75 billion in the merger, brings its production heft—think Mission: Impossible—to Paramount’s storied assets, including CBS and the Paramount film studio. National Amusements Inc. (NAI) shareholders, led by Redstone, will pocket $1.75 billion plus the assumption of NAI’s $650 million debt, totaling a $2.4 billion enterprise value. Paramount’s Class B common shareholders are set to receive $15 per share. Funding comes largely from the Ellison family—Oracle founder Larry Ellison is contributing $6 billion—alongside $2 billion from RedBird Capital Partners. An October filing clarified that Skydance CEO David Ellison, not Larry, will hold 100% of the family’s voting interests in the merged entity.

This merger was first proposed in 2024.  Talks originated, then were apparently cancelled by National Amusements, Inc. They resumed shortly thereafter.  By July, 2024 the current deal was presented. 

ROADBLOCKS

There have been several hurdles to overcome.  In February 2025, Paramount Global and Skydance Media, LLC, received approval from the Securities and Exchange Commission.  The deal soon after received approval from the European Commission, saying it presented “no significant competition concerns within the European market.”

It also needs approval from the U.S. Federal Communications Commission, which is still in play.  Here is where it gets interesting.  The FCC is currently headed by Brendan Carr, a recent Trump employee.  Trump has been pressuring acquiring companies to back off/do away with Diversity, Equity and Inclusion (DEI) programs.  Paramount recently announced they were doing just that.  Mr. Trump had also filed a $20 Billion lawsuit against CBS News, claiming they edited an interview with Vice President Kamala Harris he claims was biased towards her and from him. 

To add to the drama, Bill Owens, Executive Producer of 60 Minutes abruptly resigned last week.  In The Last Minute segment of the April 27 broadcast of 60 Minutes, host Scott Pelley addressed his resignation.  Mr. Pelley summed up his message by saying, “Bill felt he lost the independence that honest journalism requires.”  There has been consolidation in the news media, along with the entertainment industry and the publishing industry.  This consolidation will be addressed in a later article.

ANALYSIS

Consolidation in the entertainment industry is not as “crucial” as it is, say, with health care, insurance, groceries, housing.  Indeed, there is competition with such companies as Netflix, Disney, Apple, Amazon, as well as network television, movies, theatre, concerts.  However, what all companies involved in consolidation have in common is that there are both employees and customers whose livelihood is impacted, in different ways.  Company working culture may significantly change for the worse.  Customers may be faced with poor/indifferent customer service or continually rising prices. 

SOLUTIONS

The proposed acquisition between Skydance and National Amusements Inc., the parent company of Paramount, is a boardroom chess match with multiple players and multiple outcomes.

Paramount seeks a buyer because it is hemorrhaging money, mainly due to cable cutters who are now streamers.  They were slow to adjust to changing market conditions.  They made some strategic mistakes.  If Paramount is sold, Shari Redstone will come out well, as do some owners in the aftermath of blunders.   If it is finally approved, the big continue to get bigger—in this case it would be Skydance Media, LLC.  If it fails, National Amusements Inc. may have to sell off assets or face bankruptcy sometime down the road. 

With all the drama, this would make for a good movie, wouldn’t it?  I doubt if people who lost their jobs or faced a negative company culture would ever see it.  What do you think?

Google Draws the Justice Department on Monopoly Chance Cards

Judge rules with the Justice Department on Google Advertising Practices

On Friday, April 17, 2025 a Judge ruled with the Justice Department on Google advertising practices.

United States District Judge Leonie Brinkema ruled in favor of the Justice Department on charges against Google involving creating a monopoly with publisher ad servers and ad exchange markets.  Judge Brinkema also ruled that Google did not create a monopoly in ad markets. 

An excerpt from her ruling is as follows:

With the benefit of a three-week bench trial and extensive post-trial filings, the Court finds that Plaintiffs have failed to prove that there is a relevant market for open-web display advertiser ad networks, but have proven that Google has violated Section 2 of the Sherman Act by willfully acquiring and maintaining monopoly power in the open-web display publisher ad server market and the open-web display ad exchange market, and has unlawfully tied its publisher ad server (DFP) and ad exchange (AdX) in violation of Sections 1 and 2 of the
Sherman Act.

Google has been previously pursued for having a monopoly with its Chrome browser, primarily by being a default browser in phones, tablets, and computers.  The Justice Department has asked Judge Amit Mehta to divest Chrome from the parent company. 

ANALYSIS

I do not place ads with Google so it is harder for someone like me to determine if there is a true monopoly in this case.

As for Chrome, if competition with other browsers is the goal, this could be worked out without divesting something which they themselves created.

A stealth way Google, as a whole, operates a monopoly is through its acquisitions.  Google purchases companies that they could simply work with as a customer or create a partnership project.  By going the route of purchasing a company they prevent that company working for a rival or working with a third party against Google’s interests.  This is a higher priority over their argument that their company benefits from the acquisition

SOLUTIONS

Judge Brinkema ruled with the Justice Department on Google Advertising Practices on two of three charges.  Now the Judge will decide what action to take against Google.  In my opinion, if the goal is to create more competition, what is needed is for ad customers to have not only choices available but also be consciously aware of the choices and be allowed to select options.

As for the Chrome browser, an alternative to divesting would be to allow device owners to pre-select a browser from a list with brief descriptions of each.  Moving away from having the browser both pre-determined and nearly impossible to replace would be in the best interest of consumers. 

As for the monopoly with its acquisitions, here is a list of companies acquired by Google.  Look at the names, focus on what they do, and determine for yourself whether markets would be better off if these companies were once again independent and free to pursue their own customers. 

Zuckerberg May Have Meta’s Match

Meta may have tried to neutralize a potential competitor

META

The Federal Trade Commission is beginning an anti-trust suit against Meta.  This time it involves its owning What’s App and Instagram.  Their argument is a monopoly exists with owning these acquisitions, they wanted to neutralize a potential competitor, and they should be spun off.

BACKGROUND

A report on National Public Radio gives a background of the government’s case against Meta:

“The government contends that a “buy or bury” strategy propelled Meta’s acquisitions, leading Meta to gobble up competitors it viewed as threats, or to squash the rivals out of business altogether.”

It adds that an internal Meta email says they purchased Instagram to “neutralize a potential competitor” and the FTC believes this is against federal law.

The report says that Meta will summarize its argument that it is being punished for being innovative and aggressive, in other words…. successful.

According to Wikipedia, Meta/Facebook has acquired 91 companies, including What’s App and Instagram.  They have also acquired an interesting company—Onavo.  Onavo was an Israeli company in business to acquire and analyze data on a client’s competitors.  Facebook has apparently used this to track successful startups for acquisition.  The website www.onavo.com has a Facebook message that says something has gone wrong.  Facebook changed it to Facebook Israel, which promotes travel to Israel.  It has also apparently deleted numerous posts about Palestinians. 

In 2010 Facebook posted a video available on YouTube.  In it Mark Zuckerberg talks about the theory behind Facebook acquisitions.  He says that Facebook, up until then, had acquired companies not to keep the company but to acquire the talent behind it.  In other words, the owners become employees (once again) and the startup disappears.  The official line is that this is growth to them.  However, it is entirely possible to acquire good talent through direct hire, including through employee search, instead of going the acquisition route.

WHAT’S APP

According to Wikipedia What’s App was founded in 2009 by two individuals, Brian Acton and Jan Koun, previously with Yahoo! They received venture capital backing.  They sold the company to Facebook in 2014.  Acton left What’s App in 2017 over disagreements with Facebook.  Later that year he founded the competing app Signal.  Koun left the following year, also with conflicting issues with Facebook. 

ANALYSIS

FACEBOOK

There is nothing wrong with companies like Facebook/Meta with being successful.  This is Meta’s argument.  However, the end does not justify the means in this case.  Defining success through innovation – that which you started yourself from scratch – is not the same as defining it via acquisition.  And if you have acquired 91 companies, that in and of itself should warrant charges of being a monopoly.  I am not sure if people in the FTC under the Trump administration have a true anti-trust focus.  Trump supporters seem to be focused more on going after the social media apps more for suppressing freedom of speech.

SOLUTION

Breaking up the acquisitions and returning them to independent status is, IMO, a good solution.  This would return them to a position again of charting their own course. Meta will present their arguments, and some may have some weight.  It really comes down to balancing the arguments and determining which has a greater priority. 

The FTC’s argument is that Meta seeks to neutralize a potential competitor.  If judicial decisions like this fail in the courts, federal law would need to be strengthened to make the anti-trust arguments more airtight.  The law, for federal judges to agree, should be written such that it promotes what is in the best interest of the country as a whole, and not one just for individual business.