New Google and Facebook Inquiries Show Big Tech Scrutiny Is Rare Bipartisan Act

There is a major force uniting America’s fiercely partisan politicians: big technology companies. Democrats and Republicans at the federal and state levels are coming together to scrutinize the power of the Silicon Valley giants and, potentially, to rein them in.

Letitia James, the Democratic attorney general of New York, announced on Friday that attorneys general in eight states — four Democrats and four Republicans — and the District of Columbia had begun an antitrust investigation of Facebook.

Next up for state regulators is Google. A similarly bipartisan group led by eight attorneys general is set to announce on Monday a separate but comparable investigation. The search giant is expected to be the focus of the inquiry, according to two people familiar with the plan, who spoke on the condition of anonymity before the official announcement. Attorney General Ken Paxton of Texas, a Republican, is taking a leading role in the Google investigation, the people said.

The state inquiries coincide with bipartisan scrutiny of the tech giants in Washington, by House and Senate committees, the Justice Department and the Federal Trade Commission. Federal officials are examining the practices of Amazon and Apple as well as those of Facebook and Google.

The companies have caught the attention of Republicans and Democrats for somewhat different reasons. President Trump and political conservatives complain that the social media giants discriminate against them. Liberals say online platforms are barely policed conduits for right-wing conspiracy theories and racism.

As a result, the various investigations reach beyond the companies’ size, wealth and market power — the usual concerns of antitrust regulators. The companies’ handling of consumer data, their ad-targeting practices and their role as gatekeepers of communication are all under a microscope.

“The dominance of these giant technology companies warrants a closer look,” said Representative David Cicilline, the Rhode Island Democrat leading the House antitrust subcommittee that is investigating the big tech corporations. “I’m glad that members of both parties understand that.”

Senator Josh Hawley, Republican of Missouri, who began an investigation of Google in 2017, when he was his state’s attorney general, also cheered on the state officials.

“I’m heartened to see a new group of attorneys general with the courage to stand up to these powerful companies and fight for citizens,” he said on Friday.

The federal and state inquiries of today’s big tech companies are just getting started. Major investigations of industry titans like AT&T, IBM and Microsoft in the past were marathon endeavors, spanning years, and sometimes decades.

But Harry First, an antitrust expert at the New York University School of Law, said that rising public concern about the biggest tech companies was fueling the new spate of inquiries.

“It remains to be seen if we’re seeing the beginning of the hard work of serious enforcement or this is mainly political theater,” said Mr. First, a former official in the New York attorney general’s office. “But this matters, because nothing is going to happen without political support.”

Joining New York and the District of Columbia in the investigation of Facebook are the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio and Tennessee.

Ms. James of New York said all companies — including Facebook, the world’s largest social media platform — must follow the law and respect consumers.

“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,” Ms. James said.

In a statement, Will Castleberry, Facebook’s vice president of state and local policy, said the company “will work constructively with state attorneys general, and we welcome a conversation with policymakers about the competitive environment in which we operate.”

A Google spokesman had a similar response. “We look forward to working with the attorneys general to answer questions about our business and the dynamic technology sector,” he said.

That state officials would investigate Facebook and other big tech companies over antitrust and other issues had been expected, although the timing was unclear. The states’ move follows similar steps by the Federal Trade Commission and Justice Department to examine how the companies have accumulated market power and whether they have acted to reduce competition. On Friday, Google disclosed to financial regulators that the Justice Department had requested documents related to past antitrust investigations into the company.

Congress is exploring the same questions. In July, executives from Facebook, Google, Amazon and Apple — the four companies that are the focus of the Justice Department’s review — appeared at an antitrust hearing in Washington. Another hearing is planned for next week.

CreditTimothy A. Clary/Agence France-Presse — Getty Images

State regulators, typically acting in tandem with federal officials, can play an important role in major antitrust investigations. That was the case in the landmark antitrust case against Microsoft, when 20 states joined the Justice Department in suing the software giant in 1998.

Unlike that case, the current antitrust issues extend well beyond a single company. The Justice Department, for example, is focused on companies that operate in, and have come to dominate, somewhat different markets, including internet search, online advertising, e-commerce and social networks.

For Facebook, the states’ antitrust investigation puts the social media giant in regulators’ cross hairs yet again.

In July, the Federal Trade Commission voted to fine the company about $ 5 billion for mishandling users’ personal information, the agency’s largest fine ever against a tech company. Also in July, Facebook officials faced two days of grilling in Congress over a new cryptocurrency initiative called Libra.

The state antitrust investigation into Facebook could move in many different directions.

It might, for instance, align with the trade commission’s inquiry, which is focused on whether the company used what Chris Hughes, a Facebook founder, and the prominent antitrust academics Scott Hemphill and Tim Wu have called a “program of serial defensive acquisitions” to maintain its dominance in the social-networking industry.

In 2012, Facebook bought Instagram, the photo-sharing network, for $ 1 billion. Two years later, it spent $ 19 billion for WhatsApp, a global-messaging application used by more than a billion people.

Critics like Mr. Hughes, Mr. Hemphill and Mr. Wu believe that long before either acquisition, Mark Zuckerberg, a founder of Facebook and its chief executive, kept a close eye on start-ups that could pose a threat to his company. Facebook has acquired more than 70 companies over roughly 15 years.

As for Google, it escaped unscathed from a 21-month trade commission investigation that ended in 2013. The agency decided that the company did not violate antitrust laws in how it presented search results, despite often steering users to its own services, like shopping.

Google has received tougher treatment in Europe. In several antitrust investigations into its market behavior, Google has agreed to pay the European Union more than $ 8 billion in fines.

In the United States, Google agreed this week to pay a $ 170 million fine and make changes to protect children’s privacy on its YouTube video service. The settlement was reached with the trade commission and the office of Ms. James, New York’s attorney general.

Let’s block ads! (Why?)

NYT > Technology

Leave a Reply

Your email address will not be published. Required fields are marked *