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Facebook hit with antitrust investigation by states' attorneys general

Levi Sumagaysay, The Mercury News on

Published in Science & Technology News

But critics of the social media giant applauded the action.

"It's way overdue to stop the relentless push by both Google and Facebook to dominate our digital lives," Jeff Chester, executive director of advocacy group Center for Digital Democracy, said Friday. "This new AG action should force greater competition, consumer protection, and ensure that the two monopolists better serve democracy."

Donald Polden, emeritus professor of law at Santa Clara University, has wondered how antitrust laws might be applied to today's tech giants because it might be tough to prove harm to consumers.

He said Friday that after reading what the state attorneys general intend to focus on in their probe of Facebook, the mention of advertising prices might be the one to watch.

"That gets the government a little closer to legitimate concern," Polden said. "They can define that with some sort of precision."

Facebook and Google together command about 60% of online advertising, although recent reports say Amazon and Snap are starting to chip away at the two companies' market dominance. According to a forecast by eMarketer, Amazon's share of online ads is expected to grow to 8.8% this year.

Might these antitrust investigations lead to divestitures? Some critics of Big Tech, such as Sen. Elizabeth Warren, D-Mass., have called for tech mergers to be undone. In Facebook's case, its big purchases of note include Instagram and WhatsApp.

 

"Traditionally once a merger is done, enforcers and courts are reluctant to undo them because it's an incredibly messy sort of thing," Polden said. But he said it's neither impossible nor unprecedented, citing a 1960s Supreme Court decision ordering the divestiture of Vons grocery stores in California.

While the probe by the state AGs is among the first announced antitrust actions against a big U.S. tech company by American officials since the United States sued Microsoft a couple of decades ago, the European Union has issued billions of dollars worth of fines against Google in the past two years in three separate antitrust actions, and is also investigating Amazon over antitrust.

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