Facebook's Antitrust Troubles Mounting—45 States Are Now Investigating

Facebook Inc.’s antitrust woes widened on Tuesday as dozens more states joined New York’s wide-ranging investigation into whether the company’s business practices have stifled competition or put users at risk.

A total of 45 states—plus Guam and the District of Columbia—are now partnering in the bipartisan investigation, New York Attorney General Letitia James, who’s leading the probe, said in a statement.

James, a Democrat, has said the probe aims to find out whether Facebook’s actions endangered user data, reduced the quality of consumers’ choices, or increased the price of advertising, its main source of revenue.

“Big Tech must account for its actions,” Louisiana Attorney General Jeff Landry, whose state joined the probe, said in the statement. “I am proud to join my Republican and Democrat colleagues in efforts to ensure Tech Giants can no longer hide behind complexity and complicity.”

Facebook didn’t immediately return a message seeking comment.

The company’s shares dropped 2.1% as of 11:28 a.m. in New York trading.

The expansion of the probe is the latest sign that states are continuing to take aim at Big Tech, with a similar investigation led by Texas under way against Alphabet Inc.’s Google. The state probes target a wide range of practices that generate billions of dollars in revenue for the world’s biggest social-media company and the largest seller of search-based advertising.

Delving into Facebook antitrust theories

On Monday, James hosted a meeting of policy experts to discuss the strengths and weaknesses of various antitrust legal theories involving Facebook, according to a person familiar with the gathering. They also reviewed Facebook’s acquisitions of Instagram and WhatsApp, as well as privacy issues and the company’s power in the digital-advertising market, the person said. The Wall Street Journal first reported the meeting.

James and a bipartisan group of state attorneys general met earlier this month with key officials at the Justice Department and the U.S. Federal Trade Commission to discuss the investigation. Both agencies are also investigating Facebook. The meetings raised the prospect that the states could join the federal probes, similar to the way states collaborated with the epic U.S. antitrust case against Microsoft Corp. that started in the 1990s.

In addition to the federal and state probes, Facebook is also under investigation by the House Judiciary Committee, which is conducting a broad review of the control the big internet platforms have over the economy.