NY to Lead Antitrust Investigation of Facebook

A coalition of states will probe Facebook's "dominance of [social networking] and the potential anticompetitive conduct stemming from that dominance.”
Matthew HellerSeptember 6, 2019

Facebook’s antitrust headaches worsened on Friday as New York’s attorney general announced she was leading an investigation into potential anticompetitive conduct.

The social media giant is already being probed by the U.S. Federal Trade Commission, which is focusing on whether Facebook has used acquisitions of other social media companies including Instagram and WhatsApp to maintain its dominance.

New York Attorney General Letitia James said she was joining with her counterparts in seven other states and the District of Columbia to investigate “Facebook’s dominance in the industry and the potential anticompetitive conduct stemming from that dominance.”

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“Even the largest social media platform in the world must follow the law and respect consumers,” she said in a news release, adding that the attorneys general “would 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.”

As Gizmodo reports, “The launch of the investigation comes amid greater federal and state oversight of major technology companies, including Facebook, Google, Amazon, and Apple.”

In July, the U.S. Department of Justice announced it had begun an expansive investigation into “market-leading online platforms” to determine whether they “are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

Facebook confirmed the following day it was facing antitrust probes from both the FTC and the Department of Justice. A company spokesman said Facebook “will work constructively with state attorneys general, and we welcome a conversation with policymakers about the competitive environment in which we operate.”

The FTC previously voted to fine Facebook about $5 billion for mishandling users’ personal information, the agency’s largest fine ever against a tech company.

“Despite the flurry of attention from regulators, major tech companies have yet to suffer any lasting consequences that disrupt their businesses or meaningfully cut into their bottom lines,” Gizmodo said. In trading Friday, Facebook shares fell 1.7% to $187.51.

A coalition of state attorneys general is expected to announce a separate but comparable investigation into Google on Monday.

Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images