Facebook faces another antitrust investigation, with the New York State Attorney General announcing Friday that a coalition of nine AGs has launched an investigation into the social-media giant for potential antitrust violations.
The investigation focuses on “Facebook’s dominance in the industry and the potential anticompetitive conduct stemming from that dominance,” according to the announcement from New York Attorney General Letitia James. Joining New York in the probe are the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and Washington, D.C.
Facebook did not immediately respond to a request for comment. Shares of Facebook fell 2.2% in early trading Friday.
The action by the state AGs comes after Facebook disclosed two months ago that the Federal Trade Commission in June 2019 told the social-media colossus that it was the target of an antitrust investigation by the agency. That came the same day the FTC announced a 20-year settlement with Facebook over privacy violations under which the company is paying a record $5 billion fine and will submit to new regulatory oversight.
In addition, in July, the U.S. Department of Justice announced a broad antitrust probe into large online platforms, including Facebook.
“Even the largest social-media platform in the world must follow the law and respect consumers,” New York AG Letitia James 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.”
Meanwhile, Google also is set to be the target of an antitrust investigation by a group of some three dozen state AGs over the internet company’s influence over digital advertising, the Wall Street Journal reported, following an earlier story on the planned probe by the Washington Post. The Google investigation will be led by the Texas Attorney General and is set to be announced Monday, per the Journal report.
The heightened antitrust scrutiny of tech giants will likely result in fines — potentially running in the billions of dollars — but government-imposed remedies like forcing Facebook or Google to break up their businesses remain unlikely, according to Wedbush Securities analyst Dan Ives. “We reiterate our opinion that this is more noise vs. the start of broader structural changes across the tech food chain,” Ives wrote in a research note Friday, predicting “business model tweaks” and potential DOJ/FTC fines in a worst-case scenario.