Tuesday, 10 September 2019
Going After FAANG in the United States: States Attorneys General Begin Investigation into Google
An interesting question is when do you regulate a new technology. Do you regulate it early, potentially impeding its development? Or, do you give it time to develop and the industry around it? One issue with respect to waiting to regulate concerns the difficulty in doing so because of public choice issues. The industry becomes too powerful to regulate effectively, or essentially captures the agency regulating it. Some may argue that the United States, through the federal government, has failed to effectively regulate the FAANG companies—Facebook, Amazon, Apple, Netflix and Google. However, another set of potential regulators exist in the United States—State Attorneys General. Indeed, state attorneys general have led lawsuits against many industries, including tobacco and more recently the pharmaceutical industry. Those attorneys general may be subject to similar public choice issues; however, sometimes they still act. And, now, 50 attorneys general are going after Google. Here is the press release:
Attorney General Ken Paxton today announced that Texas is leading 50 attorneys general in a multistate, bipartisan investigation of tech giant Google’s business practices in accordance with state and federal antitrust laws.
The bipartisan coalition announced plans to investigate Google’s overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers. Legal experts from each state will work in cooperation with Federal authorities to assess competitive conditions for online services and ensure that Americans have access to free digital markets.
“Now, more than ever, information is power, and the most important source of information in Americans’ day-to-day lives is the internet. When most Americans think of the internet, they no doubt think of Google,” said Attorney General Paxton. “There is nothing wrong with a business becoming the biggest game in town if it does so through free market competition, but we have seen evidence that Google’s business practices may have undermined consumer choice, stifled innovation, violated users’ privacy, and put Google in control of the flow and dissemination of online information. We intend to closely follow the facts we discover in this case and proceed as necessary.”
Past investigations of Google uncovered violations ranging from advertising illegal drugs in the United States to now three antitrust actions brought by the European Commission. None of these previous investigations, however, fully address the source of Google’s sustained market power and the ability to engage in serial and repeated business practices with the intention to protect and maintain that power.