Facebook under investigation over allegations of stifling competition

Facebook phone
Facebook owns many competing services, such as Whatsapp. Photo credit: Getty

Several US state attorneys-general will investigate whether Facebook stifled competition and put users at risk, days after reports Google would face an antitrust probe.

"I'm launching an investigation into Facebook to determine whether their actions endangered consumer data, reduced the quality of consumers' choices, or increased the price of advertising," said New York Attorney-General Letitia James, who is leading the probe.

Attorneys-general investigating the company also include those of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee, and the District of Columbia, a statement on Friday said.

The New York attorney-general's office said it expected more states to join the investigation.

In response, Facebook said people had multiple alternatives to choose from for all the network's services.

"We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the United States but around the globe," Facebook vice president for state and local policy Will Castleberry said.

Castleberry added that the company would work constructively with state attorneys-general.

The company's shares were down 2 percent in early trading.

Media outlets reported on Tuesday that more than 30 US state attorneys-general, led by Texas, were readying an investigation into Alphabet's Google for potential antitrust violations, to be announced on September 9.

The probe on Google is focused on the intersection of privacy and antitrust, a source told Reuters.

Google has said that it was co-operating with the state officials.

Technology companies are facing a backlash in the US and across the world, fuelled by concerns among competitors, lawmakers and consumer groups that the firms have too much power and are harming users and business rivals.

US President Donald Trump has also called for closer scrutiny of social media firms and Google, accusing them of suppressing conservative voices online, without presenting any evidence.

In July, the US Justice Department said it was opening a broad investigation of major digital technology firms, focusing on whether they engage in anti-competitive practices.

The investigation is believed to target Google, Amazon and Facebook, and potentially Apple.

Separately, the Federal Trade Commission, which also enforces antitrust laws, is also probing Amazon and Facebook to determine if they abused their massive market power in retail and social media respectively.

Amazon, the world's biggest online retailer, has been criticised for holding sway over third-party sellers on its website, who must pay for advertising to compete against first-party and private label sales by Amazon itself.

Lawmakers have also argued that Amazon's low prices have hurt bricks-and-mortar retailers, many of whom have closed because they could not compete.

Reuters