US tech giants Google and Facebook face increasing scrutiny as authorities question how users’ data is leveraged to display advertisements. New probes will investigate if the tech companies’ outsized market share extinguishes competition.
Two bipartisan groups of state attorneys general are launching separate antitrust investigations into Facebook and Google, adding to regulatory scrutiny of two of the world’s largest and most ubiquitous tech companies.
New York Attorney General Letitia James, a Democrat, approved the Facebook investigation in a news release Friday, announcing the probe would focus on Facebook’s “dominance in the industry and the potential anticompetitive conduct stemming from that dominance.”
“Even the largest social media platform in the world must follow the law and respect consumers,” she continued. “I am proud to be leading a bipartisan coalition of attorneys general is investigating whether Facebook has stifled competition and put users at risk.”
Two groups of US state attorneys general announced antitrust investigations of Facebook and Google on Friday to probe whether the internet giants have unfairly leveraged their services to dominate the online advertising market.
New York with seven other states and the District of Columbia will investigate “whether Facebook has stifled competition and put users at risk,” New York Attorney General Letitia James announced.
“The largest social media platform in the world must follow the law,” James tweeted.
The other states attorneys general joining the action included Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, and Tennessee.
Facebook’s vice president for state and local policy, Will Castleberry, said the company would work constructively alongside the authorities.
“People have multiple choices for every one of the services we provide,” he said. “We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the United States but around the globe.”
State attorneys general from both parties are upping the pressure on Facebook and Google with antitrust probes into their practices.
However, On Friday, New York Attorney General Letitia James announced that she plans to investigate potential anticompetitive practices from Facebook and its dominance of the social media industry. The investigation could encompass multiple areas, including privacy, data collection, and monopolistic business practices.
“Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general is investigating whether Facebook has stifled competition and put users at risk,” James, a Democrat, announced in a report. “We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”
Clearly, dozens of state attorneys general are expected to join an antitrust probe into Google, according to reports from various media outlets. According to the Wall Street Journal, Texas Attorney General Ken Paxton, a Republican, will head the research. It will be announced at a news conference outside of the Supreme Court in Washington, DC, on Monday and entail about three dozen state attorneys general.
“People have multiple choices for every one of the services we provide. We understand that if we stop innovating, people can easily leave our platform,” stated Will Castleberry, vice president of Facebook, state and local policy, in a statement to Recode. “This underscores the competition we face, not only in the US but around the globe. We will work constructively with state attorneys general and we welcome a conversation with policymakers about the competitive environment in which we operate.”
Facebook announced in a statement Friday it plans to “work constructively” with the state attorneys general and welcomes a conversation with policymakers about competition.
On another hand, Google issued a statement that didn’t talk directly on the antitrust concerns but maintained its services “help people every day, create more choice for consumers, and support thousands of jobs and small businesses across the country.”
“We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector,” it added.
The probes mark a widening in the range of scrutiny the tech giants are suffering beyond federal and congressional investigations into their market dominance.
Facebook is currently facing a number of continuing investigations and legal threats, including from the US Department of Justice, the US Federal Trade Commission, the Irish Data Protection Commission, and the US Congress.
The new probe “shows how unease with large tech companies is spreading beyond Congress and the federal government agencies to the states,” said Michael Carrier, professor of antitrust law at Rutgers University. “With each passing day, there are greater fears about these companies controlling our online lives.”
Tech companies have come under raised scrutiny in recent months over their business practices, including on the matter of competition.
In July, the Department of Justice published a full antitrust review that, while it didn’t name names, made obvious that Amazon, Facebook, and Google were on the plan. The department told it would look into “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”
The FTC is also reviewing Facebook over antitrust matters. This summer, it hit Facebook with a $5 billion fine for violating user privacy as part of the Cambridge Analytica scandal. And earlier this week, it fined Google’s YouTube $170 million over violating children’s privacy laws. It’s good politics for both parties right now to go after Big Tech. On the left, you’ve got figures such as Sens. Elizabeth Warren, Bernie Sanders, and Amy Klobuchar, and on the right, Sen. Josh Hawley. Hawley was before attorney general of Missouri and launched probes of Facebook and Google from that seat. Hawley has introduced multiple bills seeking to crack down on social media.
The Trump-era Justice Department has now tried to push the bounds of antitrust law, albeit unsuccessfully. The government used a novel antitrust system when it sued to block AT&T’s acquisition of Time Warner, arguing that the combined company could hike prices for programming to consumers’ loss. It lost the case both in the lower court and on appeal.
In his January confirmation hearings, U.S. Attorney General William Barr acknowledged curiosity about how Silicon Valley giants grew so huge “under the nose” of antitrust enforcers. “I don’t’ think big is necessarily bad,” he said. “But I want to find out more about that dynamic.”