U.S. states launch antitrust probes of tech companies, focus on Facebook, Google

Sept 6 (Reuters) – Two groups of U.S. state attorneys
general on Friday announced separate antitrust probes of large
tech companies such as Alphabet’s Google GOOGL.O and Facebook
FB.O .

The first probe, led by New York and including seven other
states and the District of Columbia, focuses on Facebook. The
second, announced by Texas and likely to include up to 40 other
states, did not specify the targets among large tech companies
but was expected to center on Google.
Once lauded as engines of economic growth, the companies in
social media, Internet search, e-commerce and other digital
technologies have increasingly been on the defensive over lapses
such as privacy breaches and their outsized market influence.
Politicians including President Donald Trump, consumers,
other firms and regulators have criticized that power.
“I’m launching an investigation into Facebook to determine
whether their actions endangered consumer data, reduced the
quality of consumers’ choices or increased the price of
advertising,” New York Attorney General Letitia James tweeted.
“The largest social media platform in the world must follow
the law,” she said.
The Facebook probe will include New York, Colorado, Florida,
Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District
of Columbia, (
Texas Attorney General Ken Paxton’s office said it was
leading an investigation of large tech companies but did not
name them.
That probe, likely to include more than 40 state attorneys
general, is expected to focus on Google, sources familiar with
the matter told Reuters. A second source previously said that
the Google investigation would look at the intersection of
privacy and antitrust.*:nL3N25U3RJ
Google’s parent Alphabet said on Friday the Department of
Justice in late August requested information and documents
related to prior antitrust probes of the company. The company
added in a securities filing that it expects similar
investigative demands from state attorneys general, and that it
is cooperating with regulators.
On the federal level, the Justice Department and Federal
Trade Commission are probing Facebook, Google, Apple AAPL.O
and Amazon AMZN.O , also for potential violations of antitrust
Trump has called for closer scrutiny of social media firms
and Google, accusing them of suppressing conservative voices
online without presenting any evidence.
Facebook’s shares were down nearly 2% in afternoon trading.
Google, Apple and Amazon stocks were virtually unchanged.
Will Castleberry, Facebook’s vice president for state and
local policy, said after the New York announcement that the
company would work constructively with 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. This underscores the competition we
face, not only in the United States but around the globe,”
Castleberry said.

The tech companies have come under fire repeatedly in recent
years. Facebook, for example, has been slow to clamp down on
hate speech, and it recently paid a $5 billion settlement for
sharing 87 million users’ data with the now-defunct British
political consulting firm Cambridge Analytica. The consultancy’s
clients included Trump’s 2016 election campaign.
The social media platform, which owns one-time rivals
Instagram and WhatsApp and has more than 1.5 billion daily
users, has been criticized for allowing misleading posts and
so-called “fake news” on its service.
Google has faced accusations that its web search service,
which has become so dominant that it is now a verb, leads
consumers to its own products at the cost of competitors.
“We look forward to working with the attorneys general to
answer questions about our business and the dynamic technology
sector,” Google spokesperson Jose Castaneda said in an email.
Amazon, the world’s biggest online retailer, has been
accused of unfair tactics with third-party sellers on its
website, who must pay for advertising to compete against
first-party and private label sales by Amazon itself.
Apple has come under fire from app developers over
practices like making only iPhone apps available through its
official App Store. The music-streaming app Spotify SPOT.N has
alleged that App Store policies make it difficult to compete
against Apple Music for paid subscribers.
Amazon and Apple had no immediate comment.
State attorneys general often act jointly to influence
policy, including when the federal government lacks the
resources or is disinclined to act.
The attorneys general of 20 states and the District of
Columbia teamed up with the U.S. Department of Justice in 1998
to sue Microsoft Corp MSFT.O for trying to extend its monopoly
in personal computer operating systems to internet browsing
software. That case later settled.
More recently, 43 states and Puerto Rico sued Teva
Pharmaceutical Industries Ltd TEVA.O and 19 other drugmakers
in May, accusing them of scheming to inflate prices and reduce
competition for more than 100 generic drugs.

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