Texas Attorney General directs Google antitrust probe

Sundar Pichai, CEO of Google LLC, comes to the White House for a meeting in Washington, D.C., U.S., on Thursday, December 6, 2018.

Andrew Harrer | Bloomberg | Getty Images

Fifty attorneys generally participate in a Google investigation into possible antitrust violations, Texas Attorney General Ken Paxton, the leader of the initiative, announced Monday.

The news confirms reports last week about the bipartisan investigation into Google's practice. The bipartisan probe will take place while Facebook faces its own antitrust investigation led by New York state attorney Letitia James with attorneys general from seven states plus the District of Columbia.

Paxton said the probe will focus on Google's advertising business, "but the facts will lead where the facts lead."

Shares in Google's parent company Alphabet were down about 0.8% around the time of announcement.

The state investigations put an extra layer of pressure on both companies, which are already facing antitrust control at the federal level. Facebook confirmed an antitrust probe by the Federal Trade Commission in July after the agency hit it with a $ 5 billion fine over its privacy practices. And the Department of Justice will conduct its own antitrust investigation by Google, according to The Wall Street Journal.

So far, regulatory action at the federal level has had a minimal impact on Big Tech. Both Google and Facebook recently received fines from the FTC for handling user data that would be considered large by most standards, but representing only a small fraction of their quarterly revenue.

But antitrust, when compared to privacy and consumer protection, poses a more direct threat to these companies' business models. For example, if federal or state probes find evidence of anticompetitive behavior at Google, for example, it may be forced to make the algorithms friendlier with the rivals, even if they eat to their own profits. It may also be forced to spin by entire business units such as YouTube.

The focus on Google and Facebook by the state attorneys general means that other technology giants like Amazon and Apple will be free to investigate. Sources told the magazine last week that the investigations could be extended to other companies.

This story is evolving. Check back for updates.

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