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How do you measure the cost of free social media apps? Look at therapists’ bills

Subtitle:
UGA antitrust law researcher argues mental health costs could anchor the case to scrutinize Meta and other large social media companies
Tuesday, October 4, 2022 - 8:53am
By:
Merritt Melancon
Image:
illustration of a girl looking at her social media feed on her phone and crying

In the United States, antitrust laws exist to preserve competition, promote innovation and prevent harm to consumers. But how do you measure potential harm when a product is free?  

In the July issue of the Minnesota Law Review, University of Georgia legal studies researcher Greg Day argues in “Antitrust, Attention, and the Mental Health Crisis” that attorneys should consider measuring what people suffer in terms of mental health exacerbated by the service’s business models.  

“Elevated rates of anxiety, depression, and similar disorders can equate to paying high prices, which antitrust (suits) have missed,” said Day, an associate professor in UGA’s Terry College of Business. “Mental health disorders drain $1 trillion from the U.S. economy annually due to missed work, lost productivity, cost of treatment and elevated unemployment.”      

Recent studies in pediatric medicine and communication sciences, paired with congressional testimony and press reports, show social media exposure is addictive and excessive use damages the mental health of teenagers and adults. It’s not a flaw in the design of the social media apps but is often part of the business model that keeps people on their apps or sites, Day said. For legal purposes, Day contends those harms could be calculated as costs to individual consumers.

“Attention is the valuable commodity here,” Day said. “Companies want more and more attention on their sites because it creates more and more value. But, what they’re doing inflicts a growing economic cost they pass along to consumers in terms of exacerbated mental health costs.”

Antitrust rulings have often stemmed from actions taken by the U.S. Department of Justice or the Federal Trade Commission as well as private individuals. These lawsuits have to prove a company worked to undermine or eliminate its competition and hurt consumers in doing so.  In successful cases the harm to consumers is typically defined by higher prices, lower quality, or a lack of new products.

These cases are governed by the Sherman Antitrust Act of 1890, which doesn’t outline the criteria for identifying a harmful monopoly. What constitutes a monopoly is defined through years of rulings, Day said.

When the Federal Trade Commission brought an antitrust action against Meta in 2021, its attorneys pointed to Meta — then Facebook’s — acquisition of the smaller social media networks Instagram and WhatsApp as the company’s attempt to eliminate competitors and build a monopoly controlling social networking and the data it produces.

But they so far haven’t successfully been able to argue the monopoly posed harm to consumers—especially since it remains free to consumers.

“Modern antitrust law is guided by (individual) consumer welfare, but that can mean many things to many people,” Day said. “To a lot of people, it’s overwhelmingly the price consumers pay."

Something can cause societal harm, but that is not the same thing as something that it hurts individual consumers as a higher price would, Day noted.

“But with mental health, you can almost look at the situation and ask whether this person is out this many dollars because of the harm they suffered,” he said.

His argument threads the needle between more radical jurists — who feel antitrust actions brought under the Sherman Act should consider large-scale societal harm as consumer harm — and traditionalists who believe consumer harms mean conventional measures of economic injuries such as higher prices.

“There are two camps,” Day said. “I think I’m in a weird area in the cautious middle. This current way of doing things can remain if we can think about prices differently. We can still make antitrust about economics. We can reinvent it, but also keep its framework too.”

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