Attorneys General to Move Forward With Antitrust Probe of Big Tech
Investigation would add additional scrutiny to an industry already under a federal spotlight
WASHINGTON—A group of state attorneys general is preparing to move forward with a joint antitrust investigation of big technology companies, according to people familiar with the matter, adding another layer of scrutiny to an industry already under a federal spotlight.
The effort is expected to be formally launched as soon as next month, the people said, and is likely to focus on whether a handful of dominant tech platforms use their marketplace powers to stifle competition.
As part of the probe, the group of state attorneys general is likely to issue civil investigative demands, similar to subpoenas, to tech giants and other firms, the people said.
They said the new investigation could dovetail with plans by the U.S. Justice Department, which last month announced its own antitrust review that will focus on tech companies including Alphabet Inc. ’s Google unit and Facebook Inc.
The Wall Street Journal reported in June that a number of attorneys general were considering launching a probe into antitrust concerns surrounding Big Tech.
As that effort moved toward a formal investigation, representatives of about a dozen state attorneys general, including Republicans and Democrats, met with top Justice Department officials in Washington in July to discuss concerns about lack of competition in the tech industry, according to people familiar with the meeting.
The makeup of the multistate group is still a work in progress. A bipartisan probe could give the investigation broader leverage and help insulate GOP officials from questions over whether their actions are 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 is “participating in bipartisan conversations about this issue.” Mississippi Attorney General Jim Hood, also a Democrat, said in a statement that he continues “to be concerned with the aggregation of data in the hands of a few and [I] am always watchful of any monopoly.”
Texas Attorney General Ken Paxton, a Republican, put out a statement after last month’s meeting saying that he and other attorneys general discussed “the real concerns consumers across the country have with big tech companies stifling competition on the internet.”
The expected formal investigation by states would add a third major layer of scrutiny for the tech sector. In addition to the Justice Department probe, the Federal Trade Commission is investigating antitrust concerns at Facebook, including the company’s acquisition of nascent tech companies, as well as competitive issues elsewhere in the tech industry.
The involvement of the state attorneys general could add to complexity and cost for the companies. These officials were viewed as a driving force in the landmark joint state-federal antitrust case against Microsoft Corp. two decades ago.
The Justice Department and the FTC earlier this year reached detailed arrangements for reviewing not only Google and Facebook, but also Amazon.com Inc. and Apple Inc. It is possible that some of these big-four tech giants could receive scrutiny from multiple antitrust agencies.
Google, Facebook, Amazon and Apple all declined to comment. The companies generally say they operate fairly and don’t engage in anticompetitive behavior.
A Google spokeswoman referred to congressional testimony last month by Adam Cohen, its director of economic policy, who said the internet search and advertising giant has “helped reduce prices and expand choice for consumers and merchants in the U.S. and around the world.”
At the same hearing, Facebook’s director of public policy, Matt Perault, said the social-media king “faces intense competition for all of the products and services that we provide.”
Representatives of Apple and Amazon echoed those comments at the hearing, each saying their businesses compete against well-established rivals.
Regulators, lawmakers and legal experts, however, worry that significant slices of the high-tech marketplace have become uncompetitive. Those include online advertising, search, social media, app sales and certain retail sectors, among others.
The recent meeting between state attorneys general and the Justice Department was attended by Attorney General William Barr, Deputy Attorney General Jeffrey Rosen and Assistant Attorney General Makan Delrahim, who heads the department’s antitrust division, people familiar with the matter said.
State and federal officials made a general commitment to work together and may formally join forces, the people said. Joint concerns include tech firms’ data-fueled growth and the resulting difficulty would-be rivals face in entering their markets.
A Justice Department spokesman declined to comment.