Facebook and Its Rivals

[Cross-posted from Mises Blog]

I enjoyed the interview with Mark Zuckerberg last night on 60 Minutes, and especially his dismissive comments toward the Winklevoss Twins and their ridiculous IP suit against Facebook that extracted $64 million from the company. I’ve written about the movie Social Network as a case study of how preposterous it is to claim that parallel invention amounts to an act of thievery.

Sad to say, however, Facebook itself has used IP litigation as a method of shoring up its own market share and crushing potential rivals. It went after a German site. It targeted Teachbook. It hammered a parody site called Lamebook and a porn site too. Innumerable sites could be the subject of IP litigation, including Goodreads and Academia.edu. Such legal action is a threat to the learning and emulative process that free markets inspire. It is a way of short-circuiting the competitive process, giving Facebook an unfair advantage over its rivals, using the state has a weapon.

Facebook might must say that this is merely an eye-for-an-eye form of defensive litigation. After all, some washed up dot com is suing Facebook for IP infringement and some company no one has ever heard of claims that it invented the news feed and wants it back.

How about we just stop the madness and try the free market for a change?