Silicon Valley may soon have yet another antitrust headache on its hands. Following the launch of formal antitrust investigations by the U.S. Department of Justice, Federal Trade Commission, and House Judiciary Committee, the tech industry’s biggest players are reportedly now facing a brand-new investigation—this time from the states. The Wall Street Journal reports that a group of state attorneys general is preparing to move forward with their own antitrust investigation into the tech industry, which could be launched as soon as next month. While the report does not specify a target, similar governmental probes have focused on the Big Four tech companies: Facebook, Google, Amazon, and Apple.
Just how many attorneys general will be participating in the investigation remains unclear, though one source told the Journal there could be “up to 20 or more” states involved. Taking on the tech industry has proved to be a rare bipartisan issue in Washington D.C., and the state probe is likely to be the same, with both Democratic and Republican attorneys general voicing their support. A spokeswoman for North Carolina Attorney General Josh Stein, a Democrat, told the Journal he is “participating in bipartisan conversations about this issue,” while Texas’s Republican attorney general Ken Paxton referenced “the real concerns consumers across the country have with big tech companies stifling competition on the internet” in a statement after a recent meeting of attorneys general about the issue. “What you’re seeing is more AGs of both parties trying to pursue this issue,” Mississippi Attorney General Jim Hood, a Democrat, said in a June interview with the Journal. The current tech antitrust concerns, Hood added, are “up there with the Standard Oil trust during that era, the robber barons in the 1800s—we’re looking at that kind of political power.”
The targeted tech titans have hit back at the recent swell of accusations that they’ve perpetrated antitrust practices. Google’s director of economic policy, Adam Cohen, said at a congressional hearing that the tech giant has “helped reduce prices and expand choice for consumers and merchants in the U.S. and around the world,” while Facebook’s director of public policy, Matt Perault, claims the company “faces intense competition for all of the products and services that we provide.” A recent New York Times report suggested that Facebook has been spooked by the antitrust allegations, however, as the social media company is reportedly taking steps to ward off the FTC’s antitrust investigators. A recent planned acquisition of the video-based start-up Houseparty was recently scrapped due to antitrust concerns, and the company is currently attempting to more fully integrate Facebook and Facebook Messenger with Instagram and Whatsapp. FTC Chairman Joseph Simons confirmed Monday that Facebook’s move to integrate its infrastructure would make any efforts to break up its holdings more difficult, telling the Financial Times, “If they’re maintaining separate business structures and infrastructure, it’s much easier to have a divestiture in that circumstance than in where they’re completely enmeshed and all the eggs are scrambled.”
Any potential antitrust investigation by the states would already come on top of the Justice Department, House Judiciary, and FTC’s existing antitrust probes—plus additional international scrutiny—though the Journal reports that the state investigation could “dovetail” with the DOJ’s efforts. A smaller group of a dozen attorneys general reportedly met with DOJ officials in July to discuss their concerns about the tech companies, as state A.G.s moved forward with plans for their own investigation. Adding yet another antitrust inquiry into the mix could make things more difficult for the targeted companies and potentially result in additional fees, though it could present challenges for the investigators as well. A previous state-federal antitrust case focused on Microsoft was likely complicated by the states’ involvement, as states became divided over whether or not to accept a settlement. Experts cited by the Journal note the legal challenge was likely “expanded and extended” as a result. But while the state and DOJ probe could potentially get drawn out, the FTC at least seems to be charging ahead. Simons told the Financial Times Monday that he aims to have the agency’s Facebook investigation, which the company only recently announced in July, wrapped up by November 2020 at the latest. “Any significant case that I’m trying to emphasize, I would want to be out before the election,” Simons said.
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