Attorneys general in a number of US states open antitrust investigations into Facebook, New York's attorney, Letitia James, announced Friday. A separate inquiry to Google is expected to be announced Monday.
The new investigations mark another blow to the major technical players, who have faced increasing scrutiny from the government – most prominently an antitrust investigation by the Ministry of Justice. [1
What is an antitrust investigation?
Antitrust regulations exist to prevent businesses from having too much centralized power over an industry. State and federal lawmakers can take action to promote competition by preventing mergers, breaking up large corporations and punishing corporations for anticompetitive behavior with fines.
Why is Facebook under investigation?
The state antitrust investigations announced Friday will look at "whether Facebook has stifled competition and put users at risk," James said in a statement.
Facebook has been accused of competitive behavior, including buying up competing tech companies and copying features from rival apps.
"We will use every survey tool available to determine if Facebook's actions may have endangered consumer data, reduced the quality of consumer choices, or increased the cost of advertising," James said.
Why is Google under investigation?  A separate investigation by Google will be led by a bipartisan group of about three dozen state attorneys, according to Wall Street Jo urnal.
Details are scarce before the announcement was made, but the magazine reports that lawyers will focus on Google's impact on digital advertising markets.
What does this mean for the two tech giants?
The latest antitrust investigations show the basic business model of the world's largest technology company is becoming increasingly threatened, said Cillian Kieran, privacy compliance expert and managing director of Ethyca's privacy startup.
"They should be viewed as a watch for every business; compliance is not optional, but better data practices and operations become the basis for business growth and secure operations," he said.
Facebook is also facing pushback in Europe, where the General Data Protection Regulation (GDPR) was enacted in 2018. While state regulation in the United States would not be as decisive as federal action, states have the option of imposing large fines in antitrust cases.
What other legal battles are Facebook and Google currently fighting?  Investigations come on the heels of a chaotic year for Facebook. In July, the company was hit with a $ 5bn fine, the largest ever imposed by the Federal Trade Commission (FTC). It is also facing continued scrutiny and investigation of the proposed digital currency, Libra, due to launch in 2020.
Following the $ 5 billion fine, the FTC announced that it was conducting its own antitrust investigation against the company. Lawmakers in the House Judiciary Committee also launched an antitrust review by Facebook and Google in June 2019.
Tech companies also face pressure from the White House, which has threatened to investigate anti-conservative concentrations on social media platforms including Facebook and Twitter, and held a forum on the theme of July.
Facebook has been hit with a number of other lawsuits, unrelated to antitrust, including a lawsuit by Washington DC's attorney for the Cambridge Analytica scandal, a case in Illinois for the collection of facial recognition data, and a case brought in California over a 30 million accounts data breach in 2018.
Google, Facebook, Amazon and Apple are also subjected to a broad antitrust lawsuit opened by the US Department of Justice in July.  How have the companies responded?
Facebook has claimed that it does not monopolize the technology space and has said it will continue "a conversation" with lawmakers on the issue. Users have "multiple choices" for each service the platform offers, said Will Castleberry, vice president for state and local politics on Facebook.
"We understand that if we stop innovating, people can easily leave our platform," he said. “This underlines the competition we face, not only in the United States but across the world. We want to work constructively with state attorneys and want a conversation with policy makers about the competitive environment we operate in. ”
Google has not yet commented.