Oct 5, 2019

States add to Big Tech's headaches

Illustration: Aïda Amer/Axios

Already facing antitrust and privacy enforcement actions from governments around the globe, major tech companies are now grappling with a slew of new potential threats from individual states.

Why it matters: Local governments are more nimble and have higher levels of public trust than Congress, so they have more latitude to get laws passed quickly.

  • That's a problem for tech companies that are trying to shore up public trust while also fighting back an array of regulatory assaults.
  • "From a reputation perspective, you'd hate to have local officials who are generally more trusted gunning for you," says Washington lobbyist Bruce Mehlman.

The big picture: State attorneys general have been particularly active under the Trump administration, acting unilaterally to go their own way in some cases, and uniting to fight Washington in others.

  • Aggressive state AGs with an interest in tech often move into higher profile political roles — such as former Missouri AG Josh Hawley, who's now a Republican senator and a vocal critic of Big Tech.
  • There's also former California AG Kamala Harris, a presidential candidate who, as a senator, was tough on data privacy and election security.

At the state level, populist movements on the right and the left may converge on some tech-related issues, such as perceived partisan bias and and business market dominance.

  • Cities and states are also showing an appetite for intervening in the gig economy, which is expected to have ripple effects far beyond firms like Uber, Lyft and Doordash.

The bottom line: "There's so much change that people don't feel protected from, and the concurrent loss of trust in the establishment," Mehlman says. "So you have a rise of permission-less players who no longer think Washington should be the locus of global leadership."

Go deeper:

Go deeper

The brewing storm for Big Tech

Illustration: Sarah Grillo/Axios

The backlash against Big Tech is on track to escalate around the world in 2020 and with more concrete consequences.

Driving the news: Just this week The Verge published leaked audio of Mark Zuckerberg's internal Facebook meetings, wherein he claimed Facebook would win the legal challenge posed by Elizabeth Warren if she were elected president.

Go deeperArrowOct 5, 2019

2020 Democrats lay into Big Tech "monopolists"

Photo: Chip Somodevilla/Getty Images

Key Democratic presidential hopefuls displayed their divisions and agreements over what to do about the power of Big Tech in a lengthy chunk of Tuesday night's debate.

What they're saying: Sen. Elizabeth Warren outlined the most comprehensive antitrust-enforcement approach.

Go deeperArrowOct 16, 2019

NY attorney general talks Facebook with DOJ

New York State Attorney General Letitia James. Photo: Drew Angerer/Getty Images

New York Attorney General Letitia James, a Democrat, heads to Washington Monday to discuss the state-level antitrust investigation of Facebook she's leading with top Justice Department officials, according to a person familiar with her plans.

Why it matters: The meeting could be a precursor to the DOJ joining the Facebook investigation, which is led by New York and includes 7 other state attorneys general, plus D.C.

The big picture: James has been at the forefront of lawsuits challenging the Trump administration over immigration, environmental rollbacks and other policies, and she is also at odds with the Justice Department over the T-Mobile-Sprint merger. If she and Trump's DOJ can find common cause investigating Big Tech's power, that would be one more sign of the issue's bipartisan appeal.

Details: James is expected to meet with Attorney General William Barr, Deputy Attorney General Jeffrey Rosen and Associate Attorney General for antitrust Makan Delrahim, the person familiar with the plans said. A bipartisan group of state attorneys general is also expected to join the meeting, the person said.

  • Iowa Attorney General Tom Miller and Nebraska Attorney General Doug Peterson were part of the group of state officials in Washington for the meeting, according to their offices.
  • States investigating Google for anticompetitive practices —  including Texas and New York — sent representatives to meet with top DOJ officials in July to discuss tech antitrust issues. 
  • The Justice Department and FTC split jurisdiction over major tech companies for competition concerns earlier this year, with the FTC taking up an antitrust investigation into Facebook. But, as Bloomberg reported, Barr prodded his agency to begin its own Facebook inquiry, prompting concerns from both FTC chairman Joe Simons and Republican Sen. Mike Lee about overlapping investigations.
  • The state attorneys general also discussed the Facebook investigation at the FTC today, according to a spokesperson for the New York AG’s office.
  • The states met with FTC chairman Joe Simons, some of the commissioners, and staff from the Bureau of Competition, an FTC spokesperson said.

What they're saying: “We have grave concerns over potential anticompetitive practices by large tech companies," James said in a statement. "We are concerned that Facebook’s actions may have put consumer data at risk of data breaches, reduced the quality of consumers’ choices, and increased the price of advertising, so we will continue to work in a bipartisan manner to protect consumers and protect competition.”

  • A Justice Department spokesperson declined comment.

The bottom line: Pressure on Facebook and other tech companies is building from state capitals to Washington, where lawmakers and regulators are conducting their own investigations into the power of tech.

  • A move by the states and DOJ to join forces would mirror the antitrust investigation of Microsoft in the '90s, in which the Justice Department and several state attorneys general together sued the company.

Editor's note: This story has been updated with comment from James and details about the state attorneys general meeting with the FTC.