Facebook CEO Mark Zuckerberg has another antitrust investigation to worry about, after New York State Attorney General Letitia James said Friday she’s leading a multi-state probe into the company’s business practices.
“Even the largest social media platform in the world must follow the law and respect consumers,” James said in a statement. “I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk. 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.”
The District of Columbia and seven other states — Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio and Tennessee — are joining the investigation.
Facebook did not immediately respond to TheWrap’s request for comment. The company’s stock dropped about 2% to $187.15 per share in early-morning trading on Friday.
Facebook, along with several other Silicon Valley giants, has faced increased scrutiny this year. In July, The Justice Department opened an antitrust review into whether major tech companies have unlawfully “reduced competition” and “stifled innovation,” putting tech heavyweights like Facebook, Google, and Amazon in the crosshairs of regulators. That same month, Facebook reached a record-setting $5 billion settlement — equalling roughly 10% of the company’s 2018 revenue — with the Federal Trade Commission over several data privacy issues.
The company’s critics have complained Facebook’s $1 billion buyout of Instagram and its $19 billion purchase of WhatsApp have helped the company create a social media juggernaut — and block any competitors from rising up in the process.
Despite the added pressure from lawmakers and regulators, antitrust experts recently told TheWrap that the breakup of major tech firms is anything but a sure thing. Penn State antitrust professor John Lopatka said there are “two necessary ingredients” that would be needed to take action against a company like Facebook: Not only does there have to be proof Facebook is a monopoly, but you’d also have to show Facebook extended its monopoly “through anti-competitive conduct.”
“We can assume Facebook has monopoly power in the social media platform market, but that’s not enough,” he continued. “You still have to prove it acquired or maintains that power through anti-competitive power, and I don’t know any reason to believe that’s the case.”