Facebook to face antitrust probe by state attorneys general


(Reuters) – Several U.S. state attorneys general will investigate Facebook Inc (FB.O) on whether the social network stifled competition and put users at risk, days after reports that Google would face an antitrust probe from a host of attorneys general.

FILE PHOTO: A man poses with a magnifier in front of a Facebook logo on display in this illustration taken in Sarajevo, Bosnia and Herzegovina, December 16, 2015. REUTERS/Dado Ruvic/Illustration

“I’m launching an investigation into Facebook to determine whether their actions endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising,” tweeted New York AG Letitia James, who is leading the probe.

Attorneys general investigating the company also include those of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and the District of Columbia, a statement said. (on.ny.gov/2lG1unu)

The New York attorney general’s office said it expected more states to join the investigation.

“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 United States but around the globe,” said Will Castleberry, Facebook’s vice president for state and local policy.

Castleberry added that the company would work constructively with state attorneys general.

The company’s shares were down 2% in early trading.

Reuters and other media outlets reported on Tuesday that more than 30 U.S. state attorneys general, led by Texas, were readying an investigation into Alphabet Inc’s (GOOGL.O) Google for potential antitrust violations, to be announced on Sept. 9.

The probe on Google is focused on the intersection of privacy and antitrust, a source told Reuters.

Google has said that it was cooperating with the state officials.

Technology companies are facing a backlash in the United States and across the world, fueled by concerns among competitors, lawmakers and consumer groups that the firms have too much power and are harming users and business rivals.

U.S. President Donald Trump has also called for closer scrutiny of social media firms and Google, accusing them of suppressing conservative voices online, without presenting any evidence.

In July, the U.S. Justice Department said it was opening a broad investigation of major digital technology firms, focusing on whether they engage in anticompetitive practices. The investigation is believed to target Google, Amazon.com Inc (AMZN.O) and Facebook, and potentially Apple Inc (AAPL.O).

Separately, the Federal Trade Commission, which also enforces antitrust laws, is also probing Amazon and Facebook to determine if they abused their massive market power in retail and social media, respectively.

Amazon, the world’s biggest online retailer, has been criticized for holding sway over third-party sellers on its website, who must pay for advertising to compete against first-party and private label sales by Amazon itself.

Lawmakers have also argued that Amazon’s low prices have hurt brick-and-mortar retailers, many of whom have closed because they could not compete.

Reporting by Munsif Vengattil and Neha Malara in Bengaluru, Diane Bartz in Washington and Karen Freifeld in New York; Editing by Shinjini Ganguli and Saumyadeb Chakrabarty

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