US states announce antitrust probe of Facebook

Published September 6, 2019
In this file photo taken on July 4, 2019 in Nantes, shows the logo of the US online social media and social networking service, Facebook. — AFP
In this file photo taken on July 4, 2019 in Nantes, shows the logo of the US online social media and social networking service, Facebook. — AFP

A coalition of US states announced on Friday an antitrust investigation of Facebook to determine if the social media giant has hindered competition and put users at risk.

New York state Attorney General Letitia James released a statement announcing the action on behalf of seven other states and the District of Columbia. Joining the action were attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, according to James.

Facebook did not immediately respond to an AFP query on the announcement.

The move marks the first official United States antitrust action against one of the so-called Big Tech companies — although a landmark case had targeted Microsoft back in the 1990s.

“Even the largest social media platform in the world must follow the law and respect consumers,” James said.

“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.”

Earlier this year, the US Justice Department said it would launch a “review” of major online platforms to determine if they have stifled innovation or reduced competition.

It was not immediately clear if the states would be working in coordination with federal officials.

Facebook, by far the largest social network, in the past has claimed it is not a monopoly and that consumers have many choices for how to connect with people online.

The probe "shows how unease with large tech companies is spreading beyond Congress and the federal government agencies to the states. With each passing day, there are greater fears about these companies controlling our online lives,” said Michael Carrier, a professor antitrust law at Rutgers University.

"Facebook in particular has received attention for its acquisitions of WhatsApp and Instagram — is that too much power in one company? Should those acquisitions be unwound? The states are likely to focus on issues like these."

Sign of 'techlash'

The case may be the first in a series of antitrust actions against Big Tech firms and highlights growing "techlash", based on worries about dominant platforms which control the flow of information.

According to The Wall Street Journal, a separate coalition of states was set to launch an antitrust action against Google on Monday.

Asked about the report, Google spokesman Jose Castaneda said: “Google's 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."

Amazon and Apple may also be in the crosshairs of antitrust enforcers.

Critics have complained that Amazon wields too much power in online retail, and that Apple may disadvantage rivals offering services in its app store.

Democratic presidential candidate Elizabeth Warren has made a breakup of the big tech firms a part of her campaign platform.

But some legal analysts say the case against the tech firms faces challenges because the companies have in many cases provided services for free and brought prices down, making it hard to prove they harmed "consumer welfare", the legal standard applied under judicial precedent.

In the European Union, Google has faced a series of antitrust actions and Amazon is now being targeted by enforcers.

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