Facebook faces probe by US states over industry dominance


A bipartisan coalition of US states is probing whether Facebook 'stifled competition and put users at risk' by increasing the price of advertising, reducing consumer-choice quality and mishandling personal information. — AFP

Facebook Inc is joining Google in the cross-hairs of US state attorneys general investigating possible antitrust violations, adding to the scrutiny of Silicon Valley giants that have been widely criticised by politicians from both parties.

New York Attorney General Letitia James said Sept 6 she’s leading a bipartisan coalition of states probing whether Facebook "stifled competition and put users at risk” by increasing the price of advertising, reducing consumer-choice quality and mishandling personal information.

"We will use every investigative tool at our disposal,” James said in a statement. "Even the largest social media platform in the world must follow the law and respect consumers."

The Facebook probe is separate from an investigation into Alphabet Inc’s Google that Bloomberg reported on Sept 3. Attorneys general from more than half the states are set to announce the Google probe next week. US antitrust enforcers are already investigating the search giant’s role in the online advertising market and mobile operating systems.

Other US states in the Facebook probe include Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and the District of Columbia, according to the statement. Facebook didn’t immediately respond to a request for comment on the investigation. The Wall Street Journal reported earlier that several states plan to announce investigations into Facebook next week.

States have the power to issue fines as well as order changes to corporate policy and even a corporate break up. Such remedies aren’t being considered for Facebook at this point in the probe but are on the table in any such investigation, according to a person familiar with the investigation.

Facebook is already under investigation by New York over its unauthorised collection of 1.5 million users’ email contacts without their permission. When announcing that probe in April, James said the harvest may have exposed hundreds of millions of people to targeted advertising by the social-media company.

The collection, which was uncovered by Business Insider, was a result of Facebook’s email password verification process for new users – a process that’s standard for many online services. Facebook’s procedure, however, asked some users to hand over the password to their personal email account, James said. – Bloomberg


   

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