UPDATED 13:27 EDT / SEPTEMBER 06 2019

POLICY

Facebook facing multistate antitrust probe over social media dominance

New York State Attorney Letitia James will lead a multistate investigation of Facebook Inc. to determine if the company has abused its dominance in the social media market.

James’ office announced the probe in a brief press release this morning. Though at an early stage, the investigation is already shaping up to be a broad and potentially drawn-out effort.

The attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia have have all joined the effort. Reuters reported that more are expected to come aboard.

“Even the largest social media platform in the world must follow the law and respect consumers,” James said in a 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.”

The investigation will focus on three issues in particular. The state attorneys general will examine if Facebook, through its control of three of the world’s most popular social platforms, has reduced choice for consumers or increased ad prices. They also intend to look into whether Facebook may have “endangered” user data through its numerous privacy scandals.

It was only in July that the social network paid a record $5 billion fine for failing to adequately protect consumer information. The penalty came as part of a settlement with the Federal Trade Commission, which is currently conducting an antitrust probe into Facebook separately from the attorneys general. And the Justice Department is also looking into whether the social network abused its market position.

The latter probe is part of a broader investigation into the tech industry that targets Google LLC, too. Like Facebook, the search giant is facing mounting scrutiny both at the federal and state levels. Texas Attorney General Ken Paxton’s office announced today that a bipartisan group of state attorneys general will study potential competition law violations by Google.

The tech industry is facing growing regulatory pressure outside the U.S. as well. Since 2017, Google alone has been hit with more than $9 billion in fines by the European Union’s competition watchdog.

Facebook’s stock is down about 1.8% in trading today.

Image: Christopher Scholz/Flickr

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