There is a force uniting the nation’s fierce partisan divide: big technology companies. Democrats and Republicans at the federal and state levels are joining to scrutinize the power of the tech giants and potentially to rein them in.
Letitia James, New York’s attorney general, announced Friday that the attorneys general in eight states — four Democrats and four Republicans — and the District of Columbia had begun an antitrust investigation of Facebook.
Next up for state regulators is Google. A similarly bipartisan group led by eight attorneys general is set to announce Monday a separate but comparable investigation. The search giant is expected to be the focus of that inquiry, according to two people familiar with the plan who spoke on the condition of anonymity ahead of the official announcement.
The state investigations coincide with bipartisan scrutiny of the Silicon Valley giants that is underway in Washington, by House and Senate committees and by the Justice Department and the Federal Trade Commission.
“Something is happening that spans politics, a broad concern about Big Tech and the need to investigate these companies,” said Harry First, an antitrust expert at the New York University School of Law.
“It remains to be seen if we’re seeing the beginning of the hard work of serious enforcement or this is mainly political theater,” said First, a former official in the New York attorney general’s office. “But this matters because nothing is going to happen without political support.”
In a statement Friday, James said, “Even the largest social media platform in the world must follow the law and respect consumers.” Joining James in the effort are the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.
In a statement, Will Castleberry, Facebook’s vice president of state and local policy, said that the company “will work constructively with state attorneys general, and we welcome a conversation with policymakers about the competitive environment in which we operate.”
A Google spokesman said in a statement, “We look forward to working with the attorneys general to answer questions about our business and the dynamic technology sector.”
An announcement that state officials would open an antitrust investigation into Facebook and other Big Tech companies had been expected, although the timing was unclear. The states’ move follows similar steps by the trade commission and Justice Department to examine how the companies have accumulated market power and whether they have acted to reduce competition.
Congress is exploring the same questions, with executives from Apple, Amazon, Facebook and Google — the four companies that are the focus of the Justice Department’s review — appearing at an antitrust hearing in Washington in July. Another hearing is planned for next week.
State regulators, typically acting in tandem with federal officials, can play an important role in major antitrust investigations. That was the case in the landmark antitrust case against Microsoft, when 20 states joined the Justice Department in suing the software giant in 1998.
Unlike that case, the current antitrust issues extend well beyond a single company. The Justice Department, for example, is focused on companies that operate in, and have come to dominate, somewhat different markets, including internet search, online advertising, e-commerce and social networks.
For Facebook, the states’ antitrust investigation puts the social media giant in regulators’ cross hairs yet again.
In July, the Federal Trade Commission voted to fine the company about $5 billion for mishandling users’ personal information, the agency’s largest fine ever against a tech company. Also in July, Facebook officials faced two days of grilling in Congress over a new cryptocurrency initiative called Libra.
The state antitrust investigation into Facebook could move in many different directions. It might, for instance, align with the trade commission’s inquiry, which is focused on whether what critics have called Facebook’s “program of serial defensive acquisitions” was used to maintain the company’s dominance in the social networking industry.
Facebook bought Instagram, the photo-sharing network, for $1 billion in 2012. Just two years later, Facebook spent $19 billion for WhatsApp, a global-messaging application used by more than a billion people.
Critics believe that long before either acquisition, Mark Zuckerberg, a founder of Facebook and its chief executive, kept a close eye on startups that could pose a threat to his company. Facebook has acquired more than 70 companies over roughly 15 years.