Antitrust investigation to open against Facebook

Antitrust investigation to open against Facebook

Facebook building

The U.S. Justice Department will open an antitrust investigation of Facebook Inc, a person familiar with the matter said on Wednesday, marking the fourth recent antitrust probe of the social media company.

Facebook also faces antitrust probes by the Federal Trade Commission (FTC). They are a group of state attorneys general led by New York and the House of Representatives Judiciary Committee.

Large tech companies, including Apple, Amazon and Google, have increasingly been on the defensive in recent years over lapses such as privacy breaches and outsized market influence.

Facebook has faced extra scrutiny tied to how it allowed its platforms to be used during the 2016 U.S. presidential election.

The company, which owns one-time rivals Instagram and WhatsApp and has 2.4 billion monthly users, recently paid a $5 billion settlement for sharing 87 million users' data with defunct British political consulting firm Cambridge Analytica.

Facebook declined to comment on Wednesday.

Reuters and others reported in June the two federal agencies had divided up responsibility for the companies being investigated, with the Justice Department taking Google and Apple while the FTC looked at Facebook and Amazon.

The Justice Department later said it was opening a probe of online platforms. It did not specify which ones, but said it would consider concerns raised about "search, social media and some retail services online".

Neither agency has revealed the focus of investigations into Facebook, though the Wall Street Journal has reported that the FTC's probe is focused on the company's acquisitions.

The world's largest social network has purchased nearly 90 companies since 2003, showed data from S&P Global.

The Justice Department's antitrust chief likewise told a tech conference in August that the government is looking at previously approved acquisitions as part of its broad review.

This led some industry observers to question whether the two federal investigations would overlap.

Lawmakers, in particular Sen. Mike Lee, chair of the Senate Judiciary Committee's antitrust panel, criticized the appearance of an overlap in a hearing last week.

The agencies generally have a practice of meeting to decide who will investigate which matter but the FTC cannot probe certain areas, for example price-fixing.

The probe into Facebook by the state attorneys general, announced earlier this month, is being led by New York and also includes Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

New York Attorney General Letitia James said that investigation would look into whether Facebook's actions had endangered consumer data, reduced the quality of consumers' choices or increased the price of advertising.

Source: Reuters Washington, 26 September 2019

Reporting: by Diane Bartz &  Katie Paul

Copyright Lyonsdown Limited 2021

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