As feds loom, states hit Facebook, Google with new probes

FILE - In this Tuesday, April 18, 2017, file photo, a conference worker passes a demo booth at Facebook's annual F8 developer conference, in San Jose, Calif. New York Attorney General Letitia James says a bipartisan coalition of state attorneys general is investigating Facebook for alleged antitrust issues. James said Friday, Sept. 6, 2019 the probe will look into whether Facebook's actions endangered consumer data, reduced the quality of consumers' choices or increased the price of advertising. (AP Photo/Noah Berger, File)

Two groups of states are targeting Facebook and Google in separate antitrust probes, widening the scrutiny of Big Tech beyond sweeping federal and congressional investigations into their market dominance.

Facebook and Google are two of the world’s largest and most ubiquitous tech companies. The billions who use their services for making social media posts, uploading videos or searching ads are targeted by the tech companies for their personal data — a prized asset that enhances the companies’ power. Regulators are examining whether the companies have used their market power to crimp competition, potentially raising prices and hurting consumers.

New York Attorney General Letitia James, a Democrat, confirmed the Facebook investigation in a news release Friday, saying the probe by the coalition of states she is leading would focus on Facebook’s “dominance in the industry and the potential anticompetitive conduct stemming from that dominance.”

A separate group of state attorneys general is announcing Monday in Washington the launch of an investigation into “whether large tech companies have engaged in anticompetitive behavior that stifled competition, restricted access and harmed consumers,” an advisory from Texas Attorney General Ken Paxton said Friday. The Washington Post and The Wall Street Journal, citing sources they didn’t identify, have reported that target will be Google.

Both groups of state attorneys general include Democrats and Republicans.

With some 2.4 billion users around the globe and a huge social media presence, Facebook has sparked outrage with a series of privacy scandals and its use by Russian operatives in the 2016 presidential campaign.

In July, Facebook was hit with a $5 billion fine from the Federal Trade Commission over privacy violations.

“Even the largest social media platform in the world must follow the law and respect consumers,” James said. “I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk.”

She said the probe would seek to determine if Facebook endangered consumer data, reduced the quality of consumer choices or increased the price of advertising.

The U.S. Justice Department opened a sweeping antitrust investigation of big tech companies this summer, looking at whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers. The Federal Trade Commission has been conducting its own competition probe of Big Tech, as has the House Judiciary subcommittee on antitrust.

The lawmaker leading that investigation, Rep. David Cicilline, D-R.I., said Friday the states’ probe of Facebook is “completely appropriate.”

“Facebook has proven time and time again that it cannot be trusted to regulate itself,” Cicilline said. “I commend the state attorneys general for launching this investigation, and I look forward to working with them and learning what they uncover.”

Sarah Miller, deputy director of the Open Markets Institute, said the leadership of state attorneys general follows in the footsteps of a Microsoft antitrust probe two decades ago that led to changes in how the company operates.

“This investigation will also serve to put further pressure on federal enforcers, who have a track record of inaction, to protect consumers, competitors and our democracy from the range of dangers that Facebook’s extraordinary power presents,” Miller said in a statement.

Facebook said in a statement Friday it plans to “work constructively” with the state attorneys general and welcomes a conversation with policymakers about competition.

“People have multiple choices for every one of the services we provide,” said Will Castleberry, a vice president of state and local policy. “We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the US but around the globe.”

Google issued a statement that didn’t comment directly on the antitrust concerns but said 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 said.

James said the coalition she is leading on the Facebook investigation includes the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

Big Tech won’t be an easy target. Current interpretations of U.S. law against monopolies don’t obviously apply to companies offering inexpensive goods or free online services.

Traditional antitrust law focuses on dominant businesses that harm consumers, typically through practices that raise prices for consumers. But many tech companies offer free products that are paid for by a largely invisible trade in the personal data gleaned from those services. Others like Amazon offer consistently low prices on a wide array of merchandise.q

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