Already under investigation and review by the Federal Trade Commission and the Department of Justice, tech giants like Facebook, Amazon and Alphabet could soon face similar probes in more than a dozen states.
Appearing Tuesday at the the Technology Policy Institute’s Aspen Forum (see full video above), DOJ antitrust chief Makan Delrahim confirmed recent discussions between federal regulators and state attorneys general. While he didn’t name any states or reveal details, Delrahim said, “I think it’s probably safe to say more than a dozen” are looking at opening investigations. “A couple of dozen state attorneys general have expressed an interest in the subject matter.”
The Wall Street Journal on Monday reported the interest at the state level. Tech companies have found themselves under the microscope for, among other things, their use of data and their dominance of digital advertising. Democratic presidential candidates like Elizabeth Warren and Bernie Sanders have made breaking up Big Tech a key plank in their platforms.
Republicans, led by President Donald Trump, have also charged Facebook and Google with bias against right-wing information delivered via their platforms. Facebook earlier Tuesday released results of an investigation it commissioned on the bias claims. Former Republican Sen. John Kyl, who is leading the ongoing probe, determined that Facebook has made some strides in addressing issues of bias but still has more work to do.
When it comes to antitrust enforcement, state and federal regulators are not always aligned, Delrahim cautioned during the 45-minute discussion with CNBC anchor Brian Sullivan. As the DOJ was preparing to sue AT&T in an effort to block its acquisition of Time Warner (an effort eventually rejected by a federal judge and again on appeal), one state (which Delrahim did not identify) made a request.
In the event of a settlement and divestiture of AT&T assets, he said, the state demanded, “Rupert Murdoch cannot purchase it. Now, if anybody cares about the First Amendment, that should shake you to the core.” Delrahim said he invoked those freedom of speech concerns in rejecting the state’s request, and the state did not join the suit. While he didn’t specify the asset, CNN has often been cited as the irritant in the merger, given Trump’s long history of battling with the network.
Addressing the tech landscape more broadly, Delrahim said regulatory examination is a natural development. Their influence has grown to the point that even Facebook founder Mark Zuckerberg and Apple CEO Tim Cook, among other tech titans, have publicly conceded that regulatory sanctions would be appropriate.
“We’re living in a time of incredible innovation and prosperity. We’ve had great efficiencies that have been brought to consumers through some of the innovations,” Delrahim said. “But it’s also undeniable that people are asking questions about the market power of a certain number of companies in particular marketplaces. I don’t think it’s useful or productive to lump all technology companies together. You know, does Google compete with Facebook? … That’s part of what an investigation may reveal, what marketplace they’re in.”
As Sullivan noted, the “N” in FAANG — Netflix — has largely stayed out of the regulatory spotlight. In Delrahim’s view, the increasingly competitive marketplace in streaming has minimized the risk of the company wielding monopoly power.
“The usability of it, portability of it … these are offerings that could have been offered by any programming provider, but they weren’t,” Delrahim said. “Netflix and to some extent Amazon Prime did disrupt that system and now you’re seeing more and more movement into [streaming], which is generally, I think, a benefit for consumers.”