Facebook's Antitrust Problems Just Got Worse

By Andrew Couts on at

The Attorney General of the US state of New York, Letitia James, launched a multi-state antitrust investigation into Facebook on Friday, applying a new layer of pesky regulatory scrutiny to the scandal-ridden social network.

The launch of the investigation comes amid greater federal and state oversight of major technology companies, including Facebook, Google, Amazon, and Apple. The state-level probe will examine a wide range of Facebook’s activities, including its handling of user data, its effects on consumer choice, and the price of advertising, New York’s attorney general said in a statement.

“Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk,” James said. “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.”

Facebook did not immediately respond to our request for comment.

In addition to James, attorneys general from the states of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, and Tennessee, and from the District of Columbia, will be on the investigation’s leadership team, according to James’ office.

On 23 July, the US Department of Justice announced that it has begun an expansive investigation into “market-leading online platforms” to determine whether they “are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

The following day, Facebook confirmed that it is facing antitrust probes from both the US Federal Trade Commission and the Department of Justice. That revelation came on the heels of the FTC’s announcement earlier the same day that it had fined Facebook a record $5 billion (£4.05 billion) for privacy violations in part stemming from the Cambridge Analytica scandal. Despite the substantial fine and increased restrictions on the company’s privacy and transparency practices, the penalty was seen as inadequate by Democrats.

State-level action against major tech firms is reportedly not limited to Facebook. Google is also expected to face an investigation from “more than half” the state attorneys general, according to the Washington Post. That inquiry will reportedly be announced today.

Despite the flurry of attention from regulators, major tech companies have yet to suffer any lasting consequences that disrupt their businesses or meaningfully cut into their bottom lines. Indeed, Facebook’s stock price jumped 1.8 per cent after the FTC revealed its fine. Maybe this one will stick?

Featured image: Justin Sullivan (Getty)