Facebook, Google preliminary focus of US states' investigation into big tech

21 Aug 2019 12:00 am by Amy Miller

Facebook and Google will be the preliminary focus as about 20 state attorneys general begin an antitrust investigation into the tech industry that could be formally announced as soon as next month, MLex has learned.

The state attorneys general, which include both Democrats and Republicans, are debating what the broad parameters of the investigation will be and what specific issues and companies each state will be responsible for investigating, MLex has learned.

While some AGs want to focus specifically on antitrust issues, others are hoping to look into privacy practices as well.

AGs have not yet issued any civil investigative demands to the companies, but they could be issued as soon as early September.

The list of states interested in probing Google, Facebook and perhaps other tech giants includes New York, Iowa, North Carolina, Utah, Texas, Florida, Nebraska, Mississippi, Tennessee, Louisiana, Arizona and Missouri.

Texas, which has one of the largest staffs of antitrust attorneys among the states, is believed to be one of the states taking a lead role in what is still a loosely affiliated group of states, said people familiar with the effort who spoke anonymously because they were not authorized to discuss the probe.

A smaller group of state AGs and their staffs met last month in Washington with antitrust officials at the US Department of Justice, which has begun a broad antitrust review of the technology industry.

Makan Delrahim, chief of the DOJ’s antitrust division, said this week that about a dozen states attended that meeting, and that it's possible that federal and state enforcers would cooperate on the emerging probe. He also pushed back on speculation that states might be “more aggressive” than the DOJ in probing tech giants.

“I think it’s safe to say we’re all in the same place, having had that conversation with the state attorneys general,” Delrahim said.

The US Congress is also investigating the tech industry’s market power, and the US Federal Trade Commission has begun an antitrust investigation of Facebook and other tech companies.

A spokesman for Google declined to comment in detail today on the states’ probe, referring MLex to the congressional testimony last month of Adam Cohen, the search and advertising giant’s director of economic policy.

"In the face of intense competition, we are proud of our record of continued innovation. We have helped reduce prices and expand choice for consumers and merchants in the US and around the world,” Cohen told a House antitrust subcommittee, adding that Google has “created new competition in many sectors.”

Facebook did not immediately respond to a request for comment.

State AGs created the Tech Industry Working Group, a subgroup of the National Association of Attorneys General Antitrust Workforce, months ago. Details of the AGs’ resulting investigation are still being discussed and no formal plan of action has been announced.

The scope of the investigation could broaden as it progresses, and states are currently debating whether to conduct a broad antitrust probe that could lead to an effort to break up tech giants. But others would rather focus on more narrow, specific business practices at certain companies.

Mississippi Attorney General Jim Hood said he is “concerned with the aggregation of data in the hands of a few and am always watchful of any monopoly. As attorneys general, we need to evaluate and address specific conduct, utilizing our existing antitrust and consumer protection laws.”

Meanwhile other AGs, such as Arizona’s Mark Brnovich, have said they want to look into possible privacy violations by tech companies as well.

“Attorney General Brnovich remains particularly concerned about data privacy and the privacy rights of individual consumers,” a spokesman for Brnovich said.

Tech groups, however, are already criticizing state AGs, particularly Republicans.

“These cases brought by state AGs are weak as these platforms have neither market dominance nor engage in anti-competitive behavior,” said Carl Szabo, vice president and general counsel at NetChoice.

“State AGs should focus on industries where consumer harm actually exists,” he said. “This attack on online platforms by Republican AGs should concern conservatives who expect the GOP to be the party of small government — instead, these AGs are listening to the siren song of populism in their desire to regulate businesses they don’t like.”

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