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Home / Business / States to move forward with antitrust investigation by major technology companies

States to move forward with antitrust investigation by major technology companies



WASHINGTON – A group of states are preparing to move forward with a joint antitrust investigation of major technology companies, according to people familiar with the situation, adding a new team of investigation to an industry already under federal scrutiny.

The efforts involving state attorneys general are expected to be formally launched as soon as next month, the people said. It will likely focus on whether a handful of dominant technology platforms are using their market forces to stifle competition.

As part of the probe, states are likely to impose civilian investigative requirements, similar to subpoenas, to technology companies and other businesses, the people said.

The new investigation may be in line with the plans of the Department of Justice, which last month announced its own antitrust review that will focus on technology companies including

Alphabet
Inc.

& # 39; s Google device and

Facebook
Inc.,

said the people familiar with the plans.

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The specific number of states that may be included in the investigation could not be learned, although a person familiar with the effort said up to 20 or more can participate.

Google, Facebook,

Amazon.com
Inc.

and

apple
Inc.,

four companies that are likely to be the focus of the new investigation, all declined to comment. The companies generally say that they operate fairly and do not engage in competitive behavior.

The Wall Street Journal reported in June that a number of attorneys generally considered investigating large technology companies. As that effort went toward a formal investigation, representatives of about a dozen state attorneys general, including Republicans and Democrats, met with top Washington Department of Justice officials in July to discuss concerns about the lack of competition in the tech industry, according to people familiar with the meeting.

The political composition of the multistate group is not set. A bipartisan probe can broaden the investigation and help isolate GOP officials from questions about their actions being motivated by political concerns, such as how online platforms treat conservative speech.

A spokeswoman for North Carolina Attorney General Josh Stein, a Democrat, said he "participates in bipartisan talks on this issue." Mississippi Attorney General Jim Hood, also a Democrat, said in a statement that he continues "to be concerned with data aggregation in the hands of a few and [I] always awake to any monopoly. ”

Texas Attorney General

Ken Paxton,

a Republican, issued a statement after last month's meeting in which he said he and other attorneys generally discussed "the real concerns consumers across the country have with big tech companies that are stifling competition on the Internet."

The projected state survey will add a third most important layer for the technology sector. In addition to the Justice Department probe, the Federal Trade Commission is investigating antitrust issues on Facebook, including the company's acquisition of new technology companies, as well as competing issues elsewhere in the technology industry.

The involvement of state attorneys general can add to the complexity and cost of the companies. These officials were a driving force in the landmark joint state federal antitrust lawsuit against

Microsoft
Corp

two decades ago. Microsoft agreed on a number of issues, including making the Windows platform more accessible to third-party software developers.

But the states eventually split whether to accept a settlement. Some experts say that their involvement extended and expanded the legal battle, at times significantly.

The Department of Justice and the FTC earlier this year reached detailed arrangements to review not only Google and Facebook, but also Amazon.com and Apple. It is possible that some of these four to four tech giants may receive scrutiny from several antitrust agencies.

Asked for comment, a Google spokeswoman referred to congressional evidence last month by

Adam Cohen,

its director of economic policy, who said that the internet search and advertising giant "has helped reduce prices and broaden the choice for consumers and merchants in the United States and around the world."

At the same hearing, Facebook's director of public policy , Matt Perault, said that the social media king "faces fierce competition for all the products and services we provide."

Apple and Amazon representatives echoed these comments during the hearing, each saying that their businesses are competing against well-established rivals.

However, regulators, legislators and legal experts worry that significant slices of the high-tech market have become competitive. These include advertising, search, social media, app sales and certain retail sectors.

The recent meeting of state attorneys and the Justice Department was attended by the Attorney General

William Barr,

Attorney General

Jeffrey Rosen

and Deputy Attorney General

Makan Delrahim,

who is the head of the department's antitrust division, said people familiar with the matter.

State and federal officials generally engaged to cooperate and can formally join forces, the people said. Common concerns include technology companies with data growth and the resulting level of difficulty of competitors entering the markets.

A spokesman for the Justice Department declined to comment.

Write to John D. McKinnon at john.mckinnon@wsj.com and Brent Kendall at brent.kendall@wsj.com

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