Facebook, Google face off against a formidable new foe: State attorneys generalSeptember 9, 2019
The nation’s state attorneys general have tangled with mortgage lenders, tobacco giants and the makers of addictive drugs. Now, they’re setting their sights on another target: Big Tech.
Following years of federal inaction, the state watchdogs are initiating sweeping antitrust investigations against Silicon Valley’s largest companies, probing whether they undermine rivals and harm consumers. Their latest salvo arrives Monday, when more than 40 attorneys general are expected to announce their plan to investigate Google, delivering a rare rebuke of the search-and-advertising giant — and its efforts to maintain that dominance — from the steps of the U.S. Supreme Court.
The states seek to probe allegations that the tech industry stifles start-ups, delivers pricier or worse service for Web users, and siphons too much personal information, enriching their record-breaking revenue at the cost of consumer privacy.
“The growth of these [tech] companies has outpaced our ability to regulate them in a way that enhances competition,” said Keith Ellison, a Democratic attorney general from Minnesota who is signing on to the effort to probe Google.
“They need to be regulated,” he continued, “and my view is, it’s the state AGs job to do it, particularly when the federal government is not necessarily a reliable partner in the area.”
Historically, the federal government has taken the starring role in competition matters, including investigations into potential monopolies and mergers, and such inquiries involving the tech giants are underway. But the states are potent actors in their own right, with the power to invoke local laws on antitrust and consumer-protection and to tap Washington’s antitrust statutes on behalf of their residents.
When state attorneys general have banded together on a broad, bipartisan basis, they’ve managed to muscle major changes to other industries. They forced billions of dollars in payments from Big Tobacco to pay health claims and finance antismoking campaigns in the 1990s. Two decades later, they helped reform unfair mortgage lending practices. More recently, states have led lawsuits against pharmaceutical companies they contend are responsible for the opioid crisis.
Now, they threaten to do the same to Silicon Valley, unleashing potentially wide-ranging antitrust punishments against not only Google but all of tech’s biggest players.
“The attorneys general have found they can actually rewrite the rules for entire sectors and individual companies through these cases,” said Rob McKenna, a former attorney general in Washington state and now a partner at the law firm Orrick. “The attorneys general have a lot of power here to achieve regulation by litigation.”
For years, Silicon Valley…