Is Facebook Too Big? State Attorneys General Want To Know

Sep 6, 2019
Originally published on September 6, 2019 6:51 pm

Updated at 5:44 p.m. ET

The push to investigate Big Tech is picking up steam.

Attorneys general from eight states and the District of Columbia have launched a formal investigation into Facebook over anti-competitive practices, the New York attorney general's office confirmed Friday morning. And later in the day, Google's parent acknowledged that the Department of Justice is looking into antitrust issues at the search giant.

The probe by the states will look into whether Facebook "endangered consumer data, reduced the quality of consumers' choices, or increased the price of advertising," said New York Attorney General Letitia James in a statement.

The antitrust investigation is part of a larger review that's being coordinated with attorneys general in Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

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

This is all happening at a time when Facebook has agreed to pay $5 billion to the Federal Trade Commission for failing to protect user data from broad sharing with third-party apps, among other problems.

And the Justice Department said earlier this summer that it's launching a similarly wide-ranging antitrust review of big tech companies. The DOJ didn't name specific firms in its announcement, but it was the first clear public confirmation of a major U.S. antitrust review of the tech industry.

Alphabet, Google's parent company, on Friday said in a regulatory filing that the DOJ has requested "information and documents relating to our prior antitrust investigations in the United States and elsewhere." Alphabet said it expects to receive similar requests from state attorneys general.

"We continue to cooperate with the DOJ, federal and state regulators in the United States, and other regulators around the world," the company said.

The Justice Department said its antitrust division will look at how major online platforms have grown their share of market power and whether they are acting in ways that have "reduced competition, stifled innovation, or otherwise harmed consumers."

A request for comment from Facebook was not immediately returned.

Editor's note: Facebook and Google are among NPR's financial supporters.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

RACHEL MARTIN, HOST:

Facebook is under fire again. Attorneys general from several states have launched a formal investigation into the social media giant over anti-competitive practices. The New York attorney general's office confirmed this morning they are leading an investigation that will look at whether Facebook is hurting consumers. This is the latest move by federal and state government to get tough on big social media companies. We should note here Facebook is an NPR sponsor. We've got NPR's Aarti Shahani on the line to tell us more about this.

Hi, Aarti.

AARTI SHAHANI, BYLINE: Hi.

MARTIN: What do you know about the investigation thus far?

SHAHANI: So the New York state attorney general, Letitia James, announced she's leading a bipartisan investigation - you heard me right, bipartisan.

MARTIN: (Laughter).

SHAHANI: That's right.

MARTIN: Hurray for that.

SHAHANI: It is multipronged. First, has Facebook been negligent with consumer data? Two billion-plus users signed up for the service. That's about a quarter of the population on Earth entrusting the company.

MARTIN: Wow.

SHAHANI: And Facebook has then turned around and offered exclusive access to these stockpiles of data to partners who could maybe help Facebook grow even bigger and more powerful like Cambridge Analytica and also Airbnb. Another question that James and her colleagues will investigate is whether Facebook's growth is harming consumer choice. I'll give you an example here. Just this week, the company brought its matchmaking service to the U.S., OK? Plenty of other dating apps already exist here. Facebook takes a lot of features from those apps and could easily drive the competitors out of business not because Facebook is offering a better service but because Facebook's so dominant, startups can't compete for attention. Some advertisers have expressed concern about how much control Facebook has over the market. The AGs will take a look into that, too.

MARTIN: Is this just about Facebook? Or are there other companies targeted here?

SHAHANI: So another set of AGs is looking at Google. And that's being led by the Texas attorney general, a Republican, Ken Paxton. He's leading a multi-state probe into Google, according to The Wall Street Journal. Back in June, Paxton raised the concern that information about how people spend their lives - GPS location data from Google Maps or Waze, what we search for, what we view on YouTube. This data, he said, has become extremely valuable, especially when aggregated into large sets and analyzed and packaged for targeted marketing.

And he was concerned that the biggest platforms like Google's YouTube don't have an incentive to protect consumers. You know, just this week, Google settled a case for covertly and illegally tracking little kids as they're watching "Peppa Pig." Paxton and 42 other AGs asked the Federal Trade Commission to work closely with them to look at predatory conduct and anti-competitive practices. So presumably, that's the effort he's leading.

MARTIN: So, you know, consumers have been hearing these stories about Facebook or Google for a long time now, right? And I just wonder if you're seeing that take any - have any kind of effect because it seems to me every bad news story that comes out about these companies, consumers are, like, well, I get it. But it's just so integral in my life. It's convenient. It helps me keep in touch with family and friends.

SHAHANI: Right. But I actually think that that picture is changing, particularly as we start to understand the real stakes of it, right? There was a school of thought that maybe is still out there a bit of, hey, it's free, so it can't be bad for me. I don't pay for Facebook or YouTube. But then we have to note, Rachel, that we're entering a new chapter in history, right? That chapter is the data economy. The companies that own information, which they will then sell to other businesses - they have a whole lot of control. They can set prices. They can wipe out entire sectors. They can control what we believe and think to be true. I mean, we've reported on this repeatedly.

MARTIN: Right.

SHAHANI: So while the individual consumer right now might not feel harm in the moment, pain in the moment, in the long run, there could be a massive transfer of wealth and power that hurts us all. So I think that the picture is changing there. I would add that Google says it's working with regulators, including AGs.

MARTIN: All right. NPR's Aarti Shahani.

Aarti, thanks. We appreciate it.

SHAHANI: Thank you. Transcript provided by NPR, Copyright NPR.

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