Facebook Acquisitions Benefitted Its Employees, Sellers, and Consumers. Where Is the Harm?

The claim by the Federal Trade Commission (FTC) and 48 state attorneys general that Facebook’s acquisition of Instagram and WhatsApp qualifies as anticompetitive behavior foolishly focuses on the motivations of the world’s largest social-media firm and ignores what those acquisitions have meant for consumers.

In the filings, the FTC and the states allege that Facebook snatched up the picture-sharing and messaging apps to prevent them from becoming a competitive threat. Perhaps it did. Maybe Facebook was indeed worried about being displaced as the market leader. But what does its motivation matter? Certainly, every business decision involves a bundle of different motivations and it’s just as certain that some of those motivations are self-serving. That’s what capitalism does so well: It channels selfish impulses into benefits for consumers. As Adam Smith observed in the Wealth of Nations, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”