Patent News

Sep. 14, 2021

Federalist Society: How Snapchat’s Struggle Against Facebook Emphasizes the Need for Patent Protection as an Antitrust Tool by Sydney Lee Dominguez

Tech giants like Facebook have faced torrents of criticism for potentially anti-competitive practices, as illustrated in the recent complaint filed by the Federal Trade Commission (FTC) against Facebook. The FTC argues that Facebook has “hindered, suppressed, and deterred the emergence and growth of rival personal social networking providers” by its practice of “acquiring companies that could emerge as or aid” threats to Facebook’s overwhelming share of the social media market.

There are diverging views on how to best address these concerns.  The FTC and others are focused on forcing Facebook to divest itself of the gains received through its acquirement of companies such as Instagram and WhatsApp. But this strategy focuses on punishing Facebook rather than preventing its undesirable behavior. Why not instead prevent Facebook from buying up smaller competitors like Instagram in the first place? Not only would this strategy spare the costs of litigation over each allegedly anticompetitive incident, but it would also avoid the sledgehammer approach of breaking up companies like Facebook, which could be unjust where they did not in fact engage in anticompetitive conduct.

Antitrust litigation is not the best way to do this. Rather, stronger patent protections for small, budding tech companies would help these companies stand against buyouts by larger, more established companies. If smaller companies were equipped with strong patent protections for their innovative features, larger companies would be forced to either license patent rights to the features or innovate better features themselves, rather than simply quash competitors through purchasing them.