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Social media is set to become the dominant form of communication in the United States. In February 2019, Pew Research found that over 72% of U.S. adults used social media, double the number of users a decade ago. Social media is not only the dominant platform for communication but also for news; 68% of American adults say they have got news from social media at some point, 20% of them say they often do so. There is no doubt that social media is integral to social interaction in the modern age and this puts social media platforms in a position of great power.

It was for this reason that Representative Steve King suggested turning “the large behemoth organisations… into public utilities” in a hearing on social media filtering at a House Judiciary Committee. For firms, like Facebook, being regulated as a public utility by the United States government would make them subject to greater scrutiny and in many cases forced to make their processes of data collection and distribution more transparent. Adam Thierer, an expert on public policy online, outlines that classification as a public utility results in regulation of entry and exit into markets and quality controls. Telephone lines have been treated as public utilities, so there is some logic to doing the same for social media as it begins to dominate as the main form of communication. 

Last year, tech company Six4Three brought a lawsuit against Facebook alleging that they had abused their data collection in order to force competitors out of the market. The company alleged that Facebook founder, Mark Zuckerberg, created a “malicious and fraudulent scheme” which involved the making users’ private data available to entice developers to work within Facebook’s platform. Facebook’s decision to withhold private data from competitors could represent a barrier to competition in the industry and thus raises issues of monopolistic behaviour. 

A number of politicians and industry experts believe that reclassifying social media sites as public utilities will ensure that abuses of monopolistic power, such as the Cambridge Analytica scandal, will be prevented. There are certainly grounds for arguing that social networks and tech companies form monopolistic entities when one considers that 60% of the U.S. digital advertising market is spent on Google and Facebook.

However, some have voiced concerns over defining  social media sites as utilities. Adam Thierer notes that public utilities must be “a service or network that is entirely unique and possesses few (or no) good alternatives”. He likens a public utility to the only bridge in a town, a “bottleneck” over which a monopolist has total control and as such regulation is required to ensure that those who wish to cross the bridge may do so freely. This applies well to telephone lines as they form local monopolies because they require large scale infrastructure in any given region which, once constructed, effectively prevents competition from arising. 

However, it is less clear how social media platforms fit the existing definition of a public utility. A public utility may be effectively understood to be a natural monopoly and, despite the current market share held by Facebook, it is not obvious that social media networks form monopolies.

The online market follows a Schumpeterian vision of innovation leading to the obsolescence of existing firms. For evidence of this one just needs to look at the worries surrounding the dominance of bygone social media sites presented in news outlets running headlines like “Will MySpace ever lose its monopoly?” Despite calls for regulation that ensures monopolistic firms do not abuse their market position, the market’s changeability is a promising sign for the power of competition in this industry: Facebook’s share of the U.S. social media market has fallen from 78% in February 2018 down to 57% exactly one year later. 

Calls for the redefinition of these sites as public utilities is not only unnecessary but may represent a disruption in a market which is currently functioning well. A Centre for Market Processes study found that the deregulation of natural gas, airline, and trucking industries had led to increased consumer choice, competition and quality. Extensive evidence for the success of market liberalisation along with worries of regulatory capture should inform legislators when considering increasing control over online sites.

It seems in the era of short attention spans created by social media, the sites themselves are allotted their own fifteen minutes of fame. Given the market’s responsiveness to the abuse of users data, regulators would do well to heed the advice of Eric Schmidt who testified at the G8 in 2011 as then Google Executive Chairman: “The internet is the greatest force for good in the world. We should not have premature regulation ahead of innovation.” 

Edmund Ramsey is a Religion and Theology student at the University of Bristol and is currently undertaking a week’s work experience at Bright Blue. The views expressed in this article are those of the author, not necessarily those of Bright Blue.