Facebook Hit With State-Led Antitrust Probe

WASHINGTON (CN) – A group of eight states and the District of Columbia are launching an antitrust probe of Facebook, New York Attorney General Letitia James revealed Friday.

“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 statement. “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.”

New York Attorney General Letitia James smiles during her inauguration on Jan. 6, 2019. (AP Photo/Seth Wenig, File)

James said the multistate probe will look into the social media giant’s “dominance in the industry” and whether that dominance has had an anticompetitive effect.

The attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio and Tennessee are joining New York and the District of Columbia in the investigation, according to James’ press release.

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

Will Castleberry, vice president of state and local policy at Facebook, said Friday that the company will cooperate with the state investigation, but pushed back on claims that Facebook has squashed competition.

“People have multiple choices for every one of the services we provide,” Castleberry said 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. We will work constructively with state attorneys general and we welcome a conversation with policymakers about the competitive environment in which we operate.”

Tech companies like Facebook have come under increasing political and legal fire recently, with lawmakers and regulators on both sides of the political aisle launching or threatening investigations into their practices. Senator Elizabeth Warren has proposed breaking up big tech companies, including Facebook, Amazon and Google — a call other candidates have echoed.

On the right, lawmakers like Senator Josh Hawley, R-Mo., have criticized the growing power of tech companies and threatened investigations and changes to how the companies are regulated.

The Trump administration announced a tech probe of its own in July, focusing on whether industry leaders have operated in a way that has tamped down competition in the online marketplace. The Justice Department did not immediately respond to a request for comment on whether the federal and state probes will coordinate.

The Federal Trade Commission started its own antitrust investigation of Facebook as well.

Diana Moss, president of the American Antitrust Institute, said the state-led investigation could be a “needed counterpoint” to federal antitrust efforts, which she said have been lacking so far in the Trump administration.

“Indeed, the [Department of Justice] and FTC probes are just that — probes,” Moss said in an email. “We have not seen any enforcement action with ‘teeth’ in it at the federal level as of yet.”

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