US states launch antitrust probes of tech companies

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AGENCIES: Two groups of US state attorneys general have announced separate antitrust probes of large tech companies such as Alphabet’s Google and Facebook.

The first probe, led by New York and including seven other states and the District of Columbia, focuses on Facebook. The second, announced by Texas and likely to include up to 40 other states, did not specify the targets among large tech companies but was expected to centre on Google.

Once lauded as engines of economic growth, the companies in social media, Internet search, e-commerce and other digital technologies have increasingly been on the defensive over lapses such as privacy breaches and their outsized market influence.

Politicians including President Donald Trump, consumers, other firms and regulators have criticized that power.

“I’m launching an investigation into Facebook to determine whether their actions endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising,” New York Attorney General Letitia James tweeted.

“The largest social media platform in the world must follow the law,” she said.

The Facebook probe will include New York, Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

Texas Attorney General Ken Paxton’s office said it was leading an investigation of large tech companies but did not name them.

That probe, likely to include more than 40 state attorneys general, is expected to focus on Google, sources familiar with the matter told Reuters. A second source previously said that the Google investigation would look at the intersection of privacy and antitrust.

Google’s parent Alphabet said on Friday the Department of Justice in late August requested information and documents related to prior antitrust probes of the company. The company added in a securities filing that it expects similar investigative demands from state attorneys general, and that it is cooperating with regulators.

On the federal level, the Justice Department and Federal Trade Commission are probing Facebook, Google, Apple and Amazon, also for potential violations of antitrust law.

Trump has called for closer scrutiny of social media firms and Google, accusing them of suppressing conservative voices online without presenting any evidence.

Facebook’s shares were down nearly 2pc in afternoon trading. Google, Apple and Amazon stocks were virtually unchanged.

Will Castleberry, Facebook’s vice president for state and local policy, said after the New York announcement that the company would work constructively with state attorneys general.

“People have multiple choices for every one of the services we provide. We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the United States but around the globe,” Castleberry said.

The tech companies have come under fire repeatedly in recent years. Facebook, for example, has been slow to clamp down on hate speech, and it recently paid a $5 billion settlement for sharing 87 million users’ data with the now-defunct British political consulting firm Cambridge Analytica. The consultancy’s clients included Trump’s 2016 election campaign.

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