Facebook's market power leaves news organizations at its mercy, by Alan Fisco

Facebook’s market power leaves news organizations at its mercy, by Alan Fisco In its last second quarter financial report, Facebook reported it had more than 2.7 billion users worldwide, and 256 million users in the United States and Canada. Based on population statistics, the huge platform’s reach among users in the U.S. and Canada is almost 70% of the entire population.Facebook also reported average revenue of $7.05 per user, worldwide, and $36.49 each in the U.S. and Canada. This all added up to more than $18 billion in advertising revenue and a net income of more than $5 billion … in one quarter! According to Statista, Facebook now controls 77% of all social network advertising.How did this happen? Antitrust experts and economists refer to it as “market power.”The U.S. House Judiciary subcommittee’s report on Big Tech, released recently, called it monopoly power. This power is wielded over users and advertisers with a devastating impact on news organizations that rely on both audience and advertising revenue to survive.There are three pillars of Facebook’s market power: high switching costs, strong network effects and access to data.  » Read More