Yesterday, I talked about the fact that Twitter was joining Facebook and Google to ban cryptocurrency adverts on their respective platforms. Today, It has been reported that an association named Eurasian Blockchain Association (EBA) which consists of cryptocurrency and blockchain associations from Russia, China and South Korea, will be taking legal action against these three companies.
Representatives of key association from the three countries mentioned above, signed the agreement at the ongoing BlockchainRF-2018, which is currently taking place in Moscow. The action of these three tech and social media giants have been referred to as “cartel collusion” and I completely agree with them.
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In school, I learned from my Economics teacher what the term Collusion meant. He defined collusion as a situation were rival companies cooperate to implement a common strategy. I found a better definititoin on Investopedia. They define Collusion as
“A non-competitive clandestine or sometimes illegal agreement between rivals that attempts to disrupt the market's equilibrium. Collusion involves people or companies that would typically compete but who conspire to gain an unfair market advantage. The parties may collectively choose to restrict the supply of a good or agree to increase its price to maximize profits.”
Read more: Collusion https://www.investopedia.com/terms/c/collusion.asp#ixzz5B5UYU0K1
Let’s examine the actions of these three companies using the above definition to determine if their actions could be classified under that heading.
" People or companies that would typically compete " – Facebook and Twitter in my opinion are competitors. They offer a similar social media service to their end users so they should be at odds with each other.
" The parties may collectively choose to restrict the supply of a good " – From the actions of both companies, it is clear that both parties are trying to restrict the supply of cryptos by prohibiting actions which promote awareness.
To me, this is collusion and it is illegal and the EBA is quite right to take legal actions against them. I am looking forward to the outcome of this lawsuit.
Watch this space for updates.