Majority of US states interested in probe of Google, other tech giants

4 September 2019 8:52pm
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3 September 2019. By Mike Swift.

The number of states interested in joining an antitrust or privacy investigation of Google and other tech giants has significantly expanded in recent days, with a majority of US states now signing on to the effort, MLex has learned.

A bipartisan group of more than 30 states are discussing a scenario in which one or a few states — possibly including Texas — would issue an initial civil investigative demand to Google as soon this week.

MLex reported in August that as many as 20 states were interested in joining a probe of that for now is primarily focused on Google. But that number has grown over in recent days as media organizations reported about the probe’s earliest stages.

Some involved in organizing the effort believe as many as 40 states could join the investigation, which is increasingly focusing on narrower antitrust and privacy issues rather than pursuing a breakup of the tech giants, as some presidential candidates have called for.

For now, there appears to be less focus on other big tech companies, specifically Amazon and Apple. Texas, Mississippi, Missouri and Arizona have already gathered extensive evidence on Google through antitrust and privacy investigations of the search and advertising giant in recent years, providing the states with an insight on the judicial trench warfare they would face in dealing with the Mountain View, California-based company.

Texas is potentially one of the first states issuing an investigative subpoena because its state laws allow investigators to more easily share evidence with other states involved in the probe, and its public record laws would make it easier to keep documents confidential following the close of a probe, said people familiar with the states’ thinking.

Under that scenario, Texas and perhaps one or two other states would issue investigative demands to the companies, and would then parcel that evidence out to other groups of states that would focus on investigations of specific aspects of the companies’ businesses.

Texas, which has one of the largest antitrust staffs behind California and New York, has a history of playing a leading role in antitrust investigations. In the 1990s, Texas antitrust attorneys developed some of the leading evidence against Microsoft that ultimately became joint antitrust litigation with the US Department of Justice over the maker of the then-dominant Windows operating system tying that product to its Internet Explorer browser.

Texas Attorney General Ken Paxton has been vocal about privacy and competition concerns about Google and other tech companies.

“Information about how everyday people spend their lives and their money has become extremely valuable, especially when aggregated into large sets and analyzed and packaged for targeted marketing,” Paxton said in June when Texas and Iowa led 41 other states in filing a comment with the US Federal Trade Commission about their concerns about Big Tech. “But technology platforms often lack the incentive to provide strong privacy protections for consumers, and their dominant position in user data creates barriers to entry for new competitors.”

Josh Stein, the attorney general of North Carolina, is emerging as a leader of the effort among Democratic attorneys general; on the Republican side, Nebraska attorney general Doug Peterson has been a unifying force, people familiar with the planning effort said. But Iowa Attorney General Tom Miller, the only Democratic attorney general who attended a meeting last month with US Attorney General William Barr, is also an important figure in the effort.

Spokespersons for the attorneys general of Texas, North Carolina, Iowa and Nebraska either declined to comment on the nascent probe, or did not return requests for comment.

As they did with Microsoft in the 1990s, the states are prepared to begin a probe of the tech giants without the hand-in-glove cooperation of the US Department of Justice or the FTC, although closer cooperation will likely be necessary as the investigations advance in future months and years.

Google said in a written statement from a spokesman that it would cooperate with any probe by the states. "Google's services help people every day, create more choice for consumers, and support thousands of jobs and small businesses across the country. We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector," the company said.

Some of the states involved in the planning effort already have extensive experience with investigations of Google.

Texas launched an antitrust probe into Google’s search, which it didn’t close until four years later in 2014. The Texas AG’s office took Google to court in 2012, saying the search giant failed to comply with two investigative demands to produce documents around the state’s antitrust investigation of Google’s search practices.

Mississippi Attorney General Jim Hood has been interested in Google’s search and advertising practices as part of an antitrust investigation dating back to 2013, serving the search giant with a 79-page investigative subpoena in 2014.

Hood said earlier this year that Google is due for “a reckoning," and the Mississippi attorney general, who is also a candidate in the state’s gubernatorial election this year, is also pursuing privacy litigation against Google over apps used by students in the state’s public schools.

Last year, a regulatory filing revealed that Arizona Attorney General Mark Brnovich is investigating Google over allegations that Android devices and iPhones continued to transmit location data to Google even if users turned off location tracking on their devices.

--With assistance from Curtis Eichelberger in Washington.

ABA 2019