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New Anti-Trust Probe Launched Against Big Tech

Anti-Trust

Not long after Facebook reached a record $5 billion settlement with the FTC in a federal antitrust probe (while the DoJ continues to build its anti-monopoly case against Google), WSJ reports that two large, bipartisan groups of states' Attorneys General are preparing to launch separate antitrust probes against Google parent Alphabet and Facebook.

An investigation into Alphabet will be led by Texas AG Ken Paxton, a Republican. The bipartisan group will meet in front of the Supreme Court on Monday to officially announce the probe. Meanwhile, an overlapping group of Bipartisan AGs, led by Democratic New York AG Letitia James, will launch an investigation into Facebook.

"We continue to engage in bipartisan conversations about the unchecked power of large tech companies," Ms. James said in a statement to The Wall Street Journal when asked for comment on the probe. "The attorneys general involved have concerns over the control of personal data by large tech companies and will hold them accountable for anticompetitive practices that endanger privacy and consumer data."

 

As we mentioned above, FB recently shelled out $5 billion to settle allegations that it used deceptive disclosure opt-in practices to trick users into sharing personal information, which FB then used in its targeted advertising algorithms. It remains under scrutiny regarding its decision to buy Instagram, which some have anti-trust experts claim was a blatant violation of anti-trust law that should have been stopped - but now must be unwound.

It's widely expected that these investigations, part of the Trump Administration's crackdown on big tech, are only the beginning, and that no matter who wins the White House in 2020, the tech industry is almost guaranteed to face more anti-trust scrutiny. After all: Public opinion polls suggest Americans are growing increasingly disillusioned with the tech industry.

Policy makers are also concerned about the dominance of a handful of tech companies, particularly in the realm of social media.

"The extreme concentration in the technology industry is bad for the consumer, and in our opinion it’s bad for America," Tennessee Attorney General Herbert Slatery III said at a June hearing on antitrust concerns in the tech industry, flanked by two other state attorneys general. "The concentration has stifled innovation with market distortions [in] research and development, as entrepreneurs avoid competing with Google and Facebook and other tech giants. So we need to do something about that."

For now, it appears unlikely the state and federal investigations will be formally coordinated. But the federal enforcers have been meeting with state attorneys general, and closer cooperation could develop as the probes move forward.

"The FTC values our cooperative relationship with the AGs and routinely coordinates on tech and antitrust issues," a spokeswoman for the FTC said. Related: How To Play The Looming Recession

Typically, the involvement of states' attorneys' general doesn't bode well for the targets of the investigation, as it increases the complexity of the cases. The last major anti-trust case against a major American tech firm threatened to destabilize Microsoft roughly 20 years ago, though the company eventually agreed to an array of conditions, including making is Windows platform more widely accessible to third-party eve

But the sheer number of AGs involved from both parties is potentially problematic. At a minimum, it will add to the costs and complexity of the case. But if nothing else, it's a warning: Anti-trust scrutiny of big tech won't just 'go away'. Investigations will keep coming and coming until the biggest firms are broken up.

By Zerohedge

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