Facebook hit with antitrust investigation by NY and 7 other states, DC

The attorneys general of eight states and the District of Columbia are launching an antitrust investigation into Facebook, New York Attorney General Letitia James announced Friday.

The investigation is expected to focus on Facebook’s impact on advertising prices, data and consumer privacy and the company’s previous acquisitions, including Instagram and WhatsApp.

“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.”

The multi-state coalition includes Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio and Tennessee, James said.

In a statement, Facebook said it will work “constructively” with the attorneys general.

“We welcome a conversation with policymakers about the competitive environment in which we operate,” said Will Castleberry, Facebook’s vice president of state and local policy.

The announcement comes days before dozens of states led by Texas are expected to launch a separate antitrust investigation targeting Google and its advertising practices, two sources familiar with the matter previously told CNN Business, in another probe that adds pressure on Silicon Valley’s biggest platforms.

That investigation is expected to be announced on September 9 near the US Supreme Court, according to one of the sources. The Washington Post was first to report the expected announcement.

“We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector,” a spokesperson for Google told CNN Business in a statement on Tuesday.

Other companies could soon be drawn in by the states — either as targets of other investigations or to effectively serve as witnesses.

“With all the investigations going on, there’ll be multiple cases against multiple defendants on multiple theories [of harm],” the other source said.

The wave of state-led probes underscores widespread concerns among policymakers that Silicon Valley’s biggest players may be harming competition. The House Judiciary Committee has launched a “top-to-bottom” antitrust probe of Amazon, Apple, Facebook and Google. Meanwhile, the Department of Justice is conducting an antitrust review of the nation’s biggest tech companies.

A number of states recently met with Justice Department antitrust chief Makan Delrahim to discuss Big Tech following the Justice Department’s announcement of its review. Last month, Delrahim acknowledged at a conference in Aspen that his office is coordinating with the states.

The states themselves have not been shy about investigating the tech companies. Herbert Slatery III, Tennessee’s attorney general, said at a conference in Omaha, Nebraska, in June that “structural change driven by the government may well be necessary” to address some of the harms stemming from the tech industry.

At the same conference, Louisiana Attorney General Jeff Landry criticized Google for its dominance in online advertising, saying that the company has the power to make it inefficient and inconvenient for advertisers to use any other platform.

“Google gets to pick winners and losers because the system is rigged in their favor,” Landry said. “Continuing down this road will kill online publishing, or Google will control who stays and who goes.”

Tennessee, along with Nebraska and Louisiana, have widely been viewed as the leaders of an antitrust effort against the tech industry, at least at the state level. But Texas will be the lead state on Monday’s announcement, one of the sources said.

The looming investigation from the states isn’t the only sign that Silicon Valley’s antitrust headache is getting worse. On Tuesday, the Senate Judiciary Committee’s antitrust panel announced its own tech-focused antitrust hearing, zeroing in on corporate acquisitions by large platforms such as Facebook and Google.

Senator Mike Lee, a Republican who chairs the subcommitee, said in a statement that tech giants can often use those acquisitions to improve competition. But, he added, “they also run the risk of eliminating the very competition that may challenge the incumbent firm’s leading position in the future.”

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