But in the weeks since, new regulatory threats to the tech platforms have appeared at a steady clip. On Friday, the attorney general of New York announced that seven other states and the District of Columbia would join her in a new antitrust investigation of Facebook. Here’s Taylor Telford and Tony Romm in the Washington Post:
James will work with the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia on an inquiry focused on “Facebook’s dominance in the industry and the potential anti-competitive conduct stemming from that dominance,” according to a news release.
“Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk,” James said in a news release.
“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.”
Then today, an even bigger hammer dropped. A whopping 50 attorneys general — 48 states plus Puerto Rico and DC — announced they would join Texas Attorney General Ken Paxton in an antitrust investigation of Google. (California and Alabama are sitting this one out.) Here’s Lauren Feiner at CNBC
“When there is no longer a free market or competition, this increases prices, even when something is marketed as free, and harms consumers,” said Florida Attorney General Ashley Moody, a Republican. “Is something really free if we are increasingly giving over our privacy information? Is something really free if online ad prices go up based on one company’s control?”
When state attorneys general have banded together on a broad, bipartisan basis, they’ve managed to muscle major changes to other industries. They forced billions of dollars in payments from Big Tobacco to pay health claims and finance antismoking campaigns in the 1990s. Two decades later, they helped reform unfair mortgage lending practices. More recently, states have led lawsuits against pharmaceutical companies they contend are responsible for the opioid crisis
There are important limits to what state AGs can do here, experts told Feiner in a separate piece
“If people are expecting antitrust law to break up the platforms or fundamentally change the way they do business … my bet is they’re going to be very disappointed,” said Doug Melamed, a professor at Stanford Law School.
If states sign on to a federal case against a tech company, “I think that it would show that there is a lot of momentum behind the challenge to the tech companies,” Carrier said. “But at the end of the day, it’s still up to a court to apply antitrust law. So if the court thinks it’s not an antitrust case, it doesn’t matter if the states have signed on.”
But their power is real — and for the platforms and their legal teams, today represents a significant escalation of the threats against them. Ashley Gold and Christopher Stern lay out some reasons why in The Information
The states’ involvement ups the ante for Google parent Alphabet and Facebook in multiple ways. The companies, already under investigation for possible antitrust violations by federal regulators, now have to engage with authorities in numerous jurisdictions at once. One risk is that the states decide at some point that federal regulators aren’t moving fast enough, or being tough enough, and opt to file their own lawsuits in federal court, where antitrust cases are typically fought.
It also is possible that the attorneys general eventually could go after Facebook and Google at the state level, where the companies would be forced to fight up to dozens of individual state cases rather than resolving their legal issues in a single federal settlement. That outcome is less likely, however, experts said.
The final outcome of all this is impossible to predict. But if this summer it seemed like the biggest tech platforms might be able to escape US regulators unscathed, today’s developments would seem to make that much less likely.