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FACEBOOK Antitrust LAWSUIT | LAWYER Explains | Ian Corzine - YouTube
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hi i'm ian corzine your social media
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lawyer
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and i'm here to tell you why the u.s is
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waging an
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anti-trust war against facebook
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it all started in june of 2019
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that's when the ftc that's the u.s
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federal trade commission
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told facebook that it was going to start
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investigating facebook
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for creation of a monopoly and violation
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of antitrust laws as a side note the ftc
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is a u.s governmental agency whose job
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is to stop unfair fraudulent and
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deceptive
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business practices in america so what it
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does
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is it conducts investigations of both
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foreign and domestic companies
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it sues companies and it punishes
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companies
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if they violate ftc or anti-trust rules
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as a part of its investigation the fdc
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requested and reviewed millions and
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millions of pages of documents from
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facebook they also
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interviewed past employees and current
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employees
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they actually interviewed mark
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zuckerberg in august of 2020.
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what information was the ftc looking for
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in their investigation
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of facebook well in short any evidence
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that facebook violated the sherman
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antitrust act and to be more exact
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any evidence that facebook violated the
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ftc act
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and possibly the clayton anti-trust act
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we're not going to go into detail on
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those other acts i just wanted to let
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you know that those are applicable to
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this discussion
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too so back to the sherman anti-trust
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laws definition
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what is this act it's a law that was
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passed i think back in 1890 or so
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and basically it's designed to protect
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consumers
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from unfair competition among
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corporations
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what did the sherman anti-trust act do
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the law made sure
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that there were strong incentives for
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companies that are doing business in
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america to
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operate efficiently to make good product
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and to compete fairly in the marketplace
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what does the anti-trust law require
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companies to do
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it's going to sound kind of funny but
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basically all these big kind of scary
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sounding laws
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all they require companies to do is to
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act
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reasonably and to protect consumers so
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one thing that companies cannot do and
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which will violate
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anti-trust laws is they cannot
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collaborate with their competitors
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to rig the market so an example might be
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let's say a couple of
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camera manufacturers like you know sony
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and canon and
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nikon and maybe all the others they get
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together and they say
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the minimum price in america for a
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camera is going to be 5
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000 it doesn't matter whether or not it
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cost a hundred dollars to make the
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camera
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the minimum price in america is gonna be
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five thousand dollars
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that's where they collaborate to rig the
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market
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and to deprive consumers of the benefits
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of saving costs and being efficient the
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second thing which is
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unreasonable under antitrust laws is to
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do what i call
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bad vertical integration or bad
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horizontal
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integration now vertical integration is
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really simple it's when one
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company buys another company that's
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earlier or later
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in the supply chain so a good example
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might be mcdonald's
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they may decide to buy a cow farm which
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is earlier in the supply chain
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they may do this to be more efficient so
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it costs less to create burgers and they
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can charge less for their burgers
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horizontal integration is when one
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company buys another company and they
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have similar functions
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so a good example of that might be
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facebook when they bought instagram
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they're both social media sites that
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allow users to make
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posts on their websites for people to
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view
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so when facebook bought instagram that's
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a good example of
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horizontal integration vertical
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integration or
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horizontal integration by itself is not
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a bad thing it happens all the time
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it only becomes bad and therefore
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violates the sherman
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antitrust law if it destroys
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competition or prevents other companies
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from emerging
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in the marketplace the last type of
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unreasonable conduct that violates
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antitrust legislation
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is an unreasonable monopoly what is a
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monopoly
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that's when a company controls the
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entire
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market for a good or service in a given
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geographic location
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so a good example from the past of this
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is u.s steel
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back in the late 1800s and the early
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1900s
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u.s steel was the only place that people
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could get steel
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for construction if you wanted to have
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steel to build a skyscraper or something
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you had to go to u.s steel there were no
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other options
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so that's an example of a monopoly that
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monopoly becomes
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a violation of antitrust laws when the
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actions that the company that has a
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monopoly took
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are unreasonable they're unfair they're
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fraudulent they're deceptive
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okay that's probably enough law for now
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now you know what antitrust law is the
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question that i'm really here to answer
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is
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why is the ftc investigating facebook
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for antitrust violations
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and the answer is because in the next
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couple of days or maybe next week it is
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anticipated
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that the ftc and other state agencies
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may sue facebook for violation of the
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sherman antitrust act
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i anticipate that the ftc and
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potentially the state attorneys general
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from around the country
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are going to bring a lawsuit that says
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that facebook violated antitrust laws
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based upon what i call bad horizontal
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integration
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because they purchased instagram and
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whatsapp and they in turn
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stifled the competition in the social
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media platforms marketplace
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i also think that the ftc is going to
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argue that when facebook
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bought instagram and whatsapp that was a
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horizontal merger
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that reduced the choices for us
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consumers when we're deciding what types
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of messenger apps we're going to use
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and the final thing that i believe that
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the ftc will allege and maybe the
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state's attorney general
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is that facebook's use of our consumer
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private information to be able to sell
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to us
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was fraudulent and unfair now facebook's
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response we haven't received one yet i'm
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sure we will
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if and when a lawsuit is filed by the
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ftc
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in the past mark zuckerberg has said
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there was no
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anti-trust violations by facebook partly
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because
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he says there is so much competition
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among social media platforms he said
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snapchat and tiktok have a lot of the
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similar functions as instagram and
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facebook and potentially whatsapp
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and therefore they are invading
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facebook's market
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they are competing and if there are if
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there is competition in the social media
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space
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then that is not indicative of an
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anti-trust violation
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he also said there's no way that
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facebook has a monopoly on
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messaging apps there is qq and wechat
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and telegram
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apple messages there are dozens if not
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hundreds of different messaging apps
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facebook definitely does not have
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monopoly that is what mark zuckerberg
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says
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and mark defended facebook's collection
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of personal information by saying listen
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we did it yes but it was with your
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consent
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everything that we took from you we
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disclosed
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how we were going to use it and we told
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you what the ramifications were of it so
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yes we took your personal information
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but we did it with your permission
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so what's going to happen with this ftc
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lawsuit against facebook
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you know i don't know for sure but i do
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think that the weakest point
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facebook has sits with the horizontal
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integration argument
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i think it's a little weird that
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facebook was allowed to purchase
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instagram and whatsapp i mean that is a
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huge space
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in the internet social media marketplace
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it reminds me of like if coca-cola
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bought pepsi
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sure if they had a merged corporation
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they wouldn't control
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all the soda pop market however they
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probably would
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control 80 percent of it so i do think
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that's the weakness that facebook has in
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this potential lawsuit that should be
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filed in the next week or so
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but i really want to know what do you
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think do you think that facebook is
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going to lose this ftc lawsuit
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do you think facebook is in the right
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let me know in the comment section below
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i think the key takeaways from this
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story of the ftc and facebook are
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threefold the first one is popularity
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just remember when you create your
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business or your brand and you get more
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and more famous
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there's always going to be people out
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there and in this case the government
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to try to take you down the second thing
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i think of is the government
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power remember as you become more and
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more successful in your life
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always remember that there's the
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government check
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on your success what that means is is
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that
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you know some people think they start a
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business it starts growing they're doing
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great they're doing great
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but we remember from this last 10 month
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period or so
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that the government at any time can shut
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us down
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so as a result we have to be diverse in
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our business interests
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we can't just focus on one business and
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then go for
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five or ten years only to be shut down
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entirely
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and the final takeaway that i got is
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don't be greedy
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when facebook bought instagram and
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whatsapp
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you know it sounds greedy to me it
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sounds like it's too much if facebook
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had just continued in their lane
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doing social media posts and advertising
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and messaging
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maybe they wouldn't have drew the ire of
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the government
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and the public maybe they just bit off
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more than they can chew and it's a
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lesson for us
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when we're running our businesses it's
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so great to grow
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and to expand potentially to merge with
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other businesses
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but we have to be careful about how big
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we get
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because the bigger we get the easier it
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is for other
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external forces like the government to
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take us down
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if you have any more lessons that you
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took from this facebook ftc lawsuit
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let me know in the comment section below
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oh and one more thing
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i did a free legal brief for you which
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breaks down the ftc
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lawsuit against facebook if you'd like
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that just text
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law that's law to 213-340-3302
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that's all i got for today if you want
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to please subscribe otherwise thanks for
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watching
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you
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