Big Tech probe by state AGs could come as soon as next month, WSJ says

Key Points
  • A group of state attorneys general could launch a joint antitrust probe into Big Tech as soon as next month, The Wall Street Journal reports.
  • The probe could "dovetail" with a broad review of tech companies by the U.S. Department of Justice, according to the Journal.
  • A new probe could bring additional pressure to some of the nation's largest tech firms, which are already facing scrutiny on the federal level.
Mark Zuckerberg, chief executive officer and founder of Facebook Inc. attends the Viva Tech start-up and technology gathering at Parc des Expositions Porte de Versailles on May 24, 2018 in Paris, France.
Christophe Morin/IP3 | Getty Images News | Getty Images

A state-led antitrust probe of Big Tech firms could come as soon as next month, The Wall Street Journal reported, citing sources familiar with the situation.

The investigation would put additional pressure on large technology companies that are already facing scrutiny on the federal level. The U.S. Department of Justice announced plans in July to open its own broad antitrust review of Big Tech, though it did not name the companies on which it would focus. The state-led effort could "dovetail" with that of the Justice Department, according to the Journal.

The DOJ declined to comment on the report. Justice Department antitrust chief Makan Delrahim said in an interview with CNBC on Tuesday that there has been communication between the department and "a couple of dozen states."

News of the DOJ's investigation came shortly after reports that the agency had divided oversight of four of the country's largest tech firms with the Federal Trade Commission. Those companies reportedly included Facebook, Google, Apple and Amazon.

Amazon declined to comment. Google referred to economic policy director Adam Cohen's testimony to Congress last month. "We have helped reduce prices and expand choice for consumers and merchants in the U.S. and around the world," Cohen said then. "We have created new competition in many sectors, and new competitive pressures often lead to concerns from rivals. We have consistently shown how our business is designed and operated to benefit our customers."

Representatives from Facebook and Apple did not immediately return a request for comment.

Now, state attorneys general could target an unspecified group of large tech companies with civil investigative demands, similar to subpoenas, according to the Journal.

States had already begun to take matters into their own hands by calling for tougher oversight and enforcement by the DOJ and FTC. In June, attorneys general from 39 states along with the District of Columbia, Guam and Puerto Rico signed a letter to the FTC urging the agency to consider a broad range of factors in determining consumer harm.

In July, AGs from eight states, including New York, Texas, Arizona and Louisiana, met with U.S. Attorney General William Barr to discuss their antitrust concerns about Big Tech, according to Politico. It's unclear how many states will participate with the joint probe, but one person familiar with the effort told the Journal as many as 20 state attorneys general could join.

The office of North Carolina Attorney General Josh Stein told CNBC in a statement he "is participating in bipartisan conversations about this issue."

A spokesperson from the office of New York Attorney General Letitia James said in a statement, "we continue to engage in bipartisan conversations about the unchecked power of large tech companies. We must ensure we protect competition, protect our economy, and protect consumers. 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."

In a statement, Mississippi Attorney General Jim Hood said states are addressing antitrust concerns through the recently-formed Tech Industry Working Group.

"I continue to be concerned with the aggregation of data in the hands of a few and am always watchful of any monopoly. As attorneys general, we need to evaluate and address specific conduct, utilizing our existing antitrust and consumer protection laws," Hood said.

Representatives for attorneys general in D.C., Nebraska and California declined to comment on the report.

Even as some probes begin to reach their conclusions, it's clear lawmakers and government officials are not ready to stop scrutinizing the rise to power of large technology companies. Last month, on the day that the FTC announced its record $5 billion settlement with Facebook over the company's privacy policies, Facebook disclosed the agency had launched a new antitrust investigation into its business.

Several lawmakers and regulators, including two of the FTC's dissenting commissioners, criticized the Facebook ruling as weak. Given that the $5 billion fine represented about 9% of Facebook's 2018 revenue, Rep. David Cicilline, D-R.I., chairman of the House antitrust subcommittee, called the settlement "a slap on the wrist."

State attorneys general have played an important role in past antitrust rulings, including the case against Microsoft, which was brought by a coalition of states alongside the Justice Department. The case, which was focused on a single company rather than a broad group, resulted in some concessions from Microsoft to make its software more open to third-party developers.

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