Are Google and Facebook heading for break-up? | Tech Wash

Are Google and Facebook heading for break-up? | Tech Wash


For Facebook and Google,
the threat of breakup has become a lot more real
over the last couple of weeks. First up, we had to Letitia
James, the state attorney general for New
York, saying that she was leading a group
of eight other state AGs in an investigation
into whether Facebook has been exploiting
its market dominance. Then Google said it
was under investigation by the Department of Justice
for similar concerns. And then we had Ken
Paxton, the Texas State AG, saying he was leading a group
of 50 state and territorial AGs also looking into potential
anti-competitive practises at Google. So what does all this
mean, and how seriously should these companies
take these investigations? Well, the first thing
to say is that we’re a long way from any potential
breakup of either company. It took nine years, for example,
for officials from the Federal Trade Commission
between bringing that famous case
against Microsoft and eventually reaching a
settlement with them in 2001. However, that doesn’t mean
that these companies shouldn’t take this process seriously. Once things like
this get started, they often take on the
momentum of their own. And it is particularly
worth watching what is going on at a state level. These state AGs are seeking
to prove a vital legal point. They argue that
consumers are being harmed by Facebook and Google’s
dominant market positions, not by raising prices,
because, of course, their services are
free for users, but in a variety of other ways,
such as increasing advertising fees or by exploiting
customers by rating their data. If these AGs are successful
in arguing this legal point, it will be a vital
piece of ammunition for those who do
seek to eventually break these companies up.

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