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Facebook and Google face new antitrust investigation

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Legal pressure on two of the world’s largest technology companies ratcheted higher on Friday, as state officials from across the US prepared antitrust investigations into both Facebook and Google.

Letitia James, the New York attorney-general, announced on Friday she was leading a group of states in a fresh investigation into whether Facebook had stifled competition and hurt consumers in the process.

In addition, people close to the process have told the Financial Times that a similar probe was to be launched on Monday into Google, led by the Texas attorney-general.

Google and other major US technology companies have already paid billions of euros for antitrust violations in the EU, and now attention is shifting to whether US officials might follow suit.

Elizabeth Warren, the Democratic senator who is running for president, has said she would break up Facebook, Amazon and Google if she is elected next year, while the Federal Trade Commission has launched its own antitrust probe into Facebook.

Sam McGowan, a research analyst at the Washington-based consultancy Beacon Policy Advisers, said: “While much of how this plays out on the federal level will be decided by the 2020 elections, state AGs are able to set the rules of the battlefield and can lead federal enforcers to take action.”

State attorneys-general helped bring the landmark case against Microsoft in the late 1990 that eventually led to the company agreeing to share more information with third parties.

Legal experts say US officials wanting to take antitrust action against large technology companies will have to show that customers have been harmed by the alleged anti-competitive behaviour. They warn this could be difficult given that many of their services are low-priced, if not free.

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On Friday, Ms James suggested one way around this problem, saying the recent series of scandals over how companies use their customers’ data might provide the ammunition needed to succeed in any case.

The New York attorney-general 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.”

Both Google and Facebook have recently come under fire for violating customers’ data privacy. Earlier this year, Facebook agreed to pay a record $5bn to settle claims it had failed to protect users’ data that was leaked to the political research group Cambridge Analytica through a third-party app. 

Just this week, Google and its video subsidiary YouTube agreed to pay $170m after being accused of illegally gathering children’s data without obtaining the consent of their parents.

A Google spokesperson said on Friday: “We continue to work constructively with regulators, including attorneys-general, in answering questions about our business and the dynamic technology sector.”

Will Castleberry, vice-president for state and local policy at Facebook, said: “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 US but around the globe.”

Via Financial Times

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