By: Hadassa Kalatizadeh
New York State Attorney General, Letitia James, announced on Friday that NY will be leading the country in an investigation into Facebook for potential antitrust violations. James said she will probe “Facebook’s dominance in the industry and the potential anticompetitive conduct stemming from that dominance,” as per the AG’s press release.
“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 in a statement. “ 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.”
James will be collaborating in the investigation together with eight other Attorney Generals from states, including of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and the District of Columbia.
The share price for Facebook stocks were down about 0.5% on Friday morning before the news, but did not seem to react to James’ announcement later in the day. The social media giant, founded in 2004 led by Mark Zuckerberg, is already facing a separate investigation by the Federal Trade Commission over antitrust concerns. Facebook confirmed the FTC’s probe in its quarterly report this July. The FTC simultaneously announced its $5 billion settlement with Facebook over its privacy policies.
Notwithstanding the judgment against Facebook, the stock has incurred only a slight loss in its price and valuation. The day the FTC fine was announced, Facebook’s market value increased, more than the cost of the penalty. The amount of the fine represents only an estimated 9% of the company’s revenue for 2018.
“People have multiple choices for every one of the services we provide,” said Facebook’s Vice President of state and local policy, Will Castleberry, in a statement after James’ announcement. “We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the US but around the globe. We will of course work constructively with state attorneys general and we welcome a conversation with policymakers about the competitive environment in which we operate.”
As per CNBC News, a similar probe will be launched into another tech giant, Alphabet’s Google. Texas’ state attorney general will be leading that investigation into antitrust concerns and the effects of Google’s advertising. Some 30 other AGs from across the nation will join in the effort.
Together Facebook and Google currently command about 60 percent of all the online advertising, as per Mercury News. “It’s way overdue to stop the relentless push by both Google and Facebook to dominate our digital lives,” said Jeff Chester, executive director of advocacy group Center for Digital Democracy. “This new AG action should force greater competition (and) consumer protection, and ensure that the two monopolists better serve democracy.”