By Jody Coultas, J.D.
Nine attorneys general have formed a bipartisan coalition to investigate possible antitrust violations by Facebook, as federal enforcers and lawmakers continue scrutiny of social media platform.
The attorneys general of Colorado, Florida, Iowa, Nebraska, New York, North Carolina, Ohio, Tennessee, and the District of Columbia are conducting an investigation into Facebook, Inc.’s dominance in the industry and any anticompetitive conduct that may stem from that dominance, New York Attorney General Letitia James confirmed today.
"Even the largest social media platform in the world must follow the law and respect consumers, said James in a prepared statement. "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."
There have been a number of recent reports of federal and federal/state investigations into Facebook and other tech companies. In July, the Department of Justice Antitrust Division announced that it was reviewing whether major online platforms have achieved market power and, if so, whether they are "engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers."
The FTC also is looking into the sector. The FTC is reportedly reviewing past acquisitions by Facebook. Last month, Facebook reportedly dropped plans to acquire video chat app Houseparty in light of the investigation.
The dual federal probes of the tech sector have raised questions from Senator Mike Lee (R-Utah), chairman of the Senate Judiciary Committee’s antitrust subcommittee. He called out the "latest institutional tug-of-war" between the agencies as they are "actively battling each other to take the lead in pursuing Big Tech."
The conduct of tech companies, like Facebook, and the response of the federal antitrust enforcers has grabbed the attention of other federal lawmakers. Congressional hearings have been held on competition concerns in the tech sector. Representatives from Google, Amazon, Facebook, and Apple all appeared before the House Judiciary Committee's Antitrust Subcommittee to discuss competition in the tech sector. The July hearing was the second in a series on the topic of online platforms and market power. The first hearing, which was focused on a free and diverse press, was held in June.
Just this week, the Senate Judiciary Subcommittee on Antitrust, Competition Policy, and Consumer Rights announced that it will hold a hearing on September 24 to address concerns related to the acquisition by digital platforms of nascent or potential competitors. The hearing will explore issues relating to competition in technology markets and the antitrust agencies’ efforts to root out anticompetitive conduct. This hearing will follow the "Oversight of the Enforcement of the Antitrust Laws" hearing on September 17, at which FTC Chairman Joseph Simons and Makan Delrahim, Assistant Attorney General in charge of the Department of Justice Antitrust Division will address the committee.
Before Congress, Facebook has argued that it faces intense competition for all the products and services that the company provides, including competition from Twitter, Snapchat, Apple, iMessage, Pinterest, Skype, Telegram, Viber, Google, YouTube, and Amazon. Also, in a move that might alleviate some antitrust concerns, Facebook recently touted its support of the principle of data portability and new generation of data portability tools that enable people to download their information from Facebook and take that information to another service while protecting that data.
Privacy concerns. State and federal regulators have also expressed concerns with Facebook’s control over and protection of consumer data, which recently culminated in a record-setting $5 billion settlement with the FTC. The 20-year settlement order requires Facebook to overhaul the company’s corporate governance and privacy program, and strengthen external oversight of Facebook. The "checks and balances" under the settlement removes the ability of CEO Mark Zuckerberg from unilaterally charting the path for consumer privacy and Facebook, given his penchant to "move fast and break things." The order covers Facebook’s WhatsApp and Instagram apps as well.
Companies: Facebook, Inc.
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