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Business & Technology

Facebook Being Investigated for Antitrust by 8 States and DC

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Facebook Being Investigated for Antitrust by 8 States and DC

2019-09-06 18:42:171 Oct 2018 01:53 AM EST

By Laura Tucker, Staff writer; Image: Facebook (Image source: Public domain)

 

Many people live and breathe by Facebook. They start their day with it and end their day with it and are often checking in during the moments in between. But does this mean they're violating antitrust laws?

 

Eight states, including New York, and Washington D.C., believe Facebook is in violation of antitrust violations. They believe Alphabet, the parent company of Google, is as well. 

New York Attorney General Letitia James announced on Friday that she is leading a multi-state investigation that will focus on "Facebook's dominance in the industry and the potential anti-competitive conduct stemming from that dominance," said a news release.

 

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

"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."

 

More than half of the state attorneys general are preparing an investigation of Google, but it's unclear whether other tech leaders will find themselves in trouble as well. That multi-state effort will be officially announced on Monday. 

Facebook denied it broke laws but welcomes the investigation into its practices. "People have multiple choices for every one of the services we provide," noted Will Castlberry, the vice president of state and local policy at Facebook, in a statement.

 

"We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the U.S. but around the globe. 

He added a vow to "work constructively with the attorneys general, and we welcome a conversation with policymakers about the competitive environment in which we operate."

 

Regulators have expressed a growing concern over the power of big tech companies with their access to user data, and with Facebook and Google in particular, how the two purchase smaller rivals to maintain their dominance. 

Two federal antitrust agencies have already begun investigations of the tech industry at large, while Congress has questioned Amazon, Apple, Facebook, and Google suits about how they conduct business.

 

"We believe that a broad movement to break up companies solely because they are large will fail without a change to existing antitrust laws," said Wedbush Securities analyst Dan Ives in a note to investors. 

"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 already agreed to pay $5 billion and submit to federal oversight to settle allegations made by the FTC that they had repeatedly deceived users regarding their personal data. It was the largest fine in history for a privacy violation. 

The government investigated Google about six years ago but decided against penalizing it.

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