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Tech Antitrust Probes Good Politics for State AGs, but Terrible for Consumers

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According to reports, a group of state attorneys general are planning to launch antitrust probes into Facebook and Alphabet’s Google division. New York AG Leticia James announced an investigation into Facebook over control of personal data and privacy concerns, while Texas AG Ken Paxton will look into Google’s impact on digital advertising.

Associate Director of CEI’s Center for Technology and Innovation Jessica Melugin said:

“These state attorneys general are expanding the power of their office and stretching the limits of what constitutes an antitrust violation. This sort of high-profile activism may benefit state AGs’ political ambitions, but impose harmful costs on consumers, businesses, and the economy. The mere threat of legal penalties—and the environment of over-caution it engenders—also has a chilling effect on entrepreneurs. Such opportunity costs are impossible to measure.

“The only consistency among the various state, federal agency, and congressional antitrust investigations into big tech seems to be that none of them have much to do with the well-established test for antitrust law in the US; consumer harm. It will be just as difficult for state officials to prove that consumers have been harmed by the services, innovations, and conveniences of companies like Facebook, Google, Apple, and Amazon as it will be for federal regulators to find evidence of customers suffering.”

CEI President and CEO Kent Lassman said:

“Both Facebook and Google have delivered value for consumers the world over, offer their respective primary services for free, and compete in a multichannel, highly competitive advertising market. A handful of attorneys general have identified a way to keep their names in the news for years to come. Abusive antitrust regulation often appears to be a winner for ambitious politicians. Everyone else — including new market entrants and small players who get overlooked amid all the shouting — loses.”

CEI Research Fellow Patrick Hedger said: 

“The term ‘monopolies’ is an oxymoron. If it’s plural, it’s not a problem. It is astounding that multiple levels of government are pursuing antitrust investigations against several ferocious competitors in the technology space. These investigations rely on the thinking that Facebook is just social media and Google is just a search engine. Yet these companies compete in advertising, messaging services, artificial intelligence, and an endless list of other visible and invisible areas we take for granted. They also compete for the trust of the American consumer in how they handle issues such as privacy and provide consumers with different trade-offs. Ultimately the bottom line of these companies depends on where Americans choose to spend their time online. Are they watching videos on Google-owned YouTube and messaging their friends on Gmail, or are they scrolling through Facebook and chatting on Messenger? These companies hold each other infinitely more accountable than a handful of politicians could ever hope to.”

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