FILE PHOTO: A man poses with a magnifier in front of a Facebook logo on display in this illustration taken in Sarajevo, Bosnia and Herzegovina, December 16, 2015. REUTERS/Dado Ruvic/Illustration/File Photo (Dado Ruvic/Reuters)
New York is leading a multistate investigation of Facebook for possible antitrust violations, Attorney General Letitia James announced Friday, kicking off a bipartisan wave of independent state inquiries targeting the social media giant as well as Google’s parent company, Alphabet.
James will work with the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia on an inquiry focused on “Facebook’s dominance in the industry and the potential anti-competitive conduct stemming from that dominance,” according to a news release.
[Google emerges as target of a new state attorneys general antitrust probe]
“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 in investigating whether Facebook has stifled competition and put users at risk,” James said in a news release. “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.”
The Post previously reported that more than half the nation’s attorneys general were readying a Google investigation, expected to be announced Monday in Washington, but it was unclear whether other tech giants like Facebook and Amazon would find themselves in the coalition’s crosshairs. The Wall Street Journal first reported that Facebook would also be subject to investigation, and that the effort could expand to include other companies.
“Google’s services help people every day, create more choice for consumers, and support thousands of jobs and small businesses across the country,” Google spokesman Jose Castaneda said in a statement emailed to The Post. “We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector.”
Regulators around the country have signaled growing concerns about the breadth of Silicon Valley’s power in recent months, questioning the industry’s access to vast amounts of proprietary data — and deep pockets — that allow companies to gobble up rivals and maintain their dominance to the detriment of consumers.
Two federal antitrust agencies have opened probes targeting the industry broadly, while lawmakers in Congress have grilled executives from Amazon, Apple, Facebook and Google about the business practices. But it remains to be seen whether the investigations will stick to the world’s most powerful companies. (Amazon founder Jeff Bezos owns The Washington Post.)
“We believe that a broad movement to break up companies solely because they are large will fail without a change to existing antitrust laws,” Dan Ives, an analyst with Wedbush Securities, wrote in a note to investors Friday. “The “too big, must be broken up” argument is a more difficult one to make in our opinion as current antitrust law does not provide for a forced breakup solely due to the size of the business; if it did, Walmart would have been broken up decades ago.”
Facebook did not immediately respond to requests for comment from The Post.
In July, Facebook paid $5 billion and agreed to submit to significant federal oversight of its business practices to settle Federal Trade Commission allegations that the company had repeatedly deceived its users about how and who was accessing their personal data. The fine was the largest in history for a privacy violation.
For Google, the states’ heightened interest comes about six years after the U.S. government formally studied the tech giant’s search-and-advertising business but opted against slapping it with significant penalties. The inaction in the United States came to stand in stark contrast with Europe, which later issued a series of stinging, multibillion-dollar fines against the company for the way it displays search results and manages its Android smartphone operating system.