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Google, Facebook & Twitter:
CRE Petitions FTC to Set Rules of the Road

Google, Facebook and Twitter have much in common. All three firms are very popular web-based companies that have pioneered or reinvented their primary area of expertise. All three businesses are American companies that have changed how the world uses the internet. Of particular note, all three companies provide their primary services to consumers for free.

Also of note, all three firms are either under FTC investigation (Google and Twitter) or are the subject of a petition to the FTC to be investigated (Facebook).

The three firms share another important commonality that is directly relevant for antitrust analysis, all three firms operate in "two-sided markets" which means the businesses need to bring together two interdependent groups of customers, just as newspapers bring together readers and advertisers. Economists have explained that "failure to account for the consequences of interlinked demand between the two sides can lead antitrust analysis into serious error."

To ensure that there are transparent, objective "rules of the road" in place to guide any antitrust-related analysis or investigation of the companies, the Center for Regulatory Effectiveness has petitioned the FTC to develop a trade rule for web-based service companies that operate in two-sided markets.

Unless the FTC develops and publishes clear standards of competition for companies such as Google, Facebook and Twitter, any investigation would lead to a public perception that the agency is interpreting ambiguous rules to obtain a preconceived solution.

See CRE Petition to the FTC

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