Facebook Faces Antitrust Investigation by State Attorneys General

Regulators in eight states and the District of Columbia are moving forward with an antitrust investigation of Facebook, New York’s attorney general said on Friday, the latest move by government officials to increase scrutiny of America’s technology giants.

“Even the largest social media platform in the world must follow the law and respect consumers,” Attorney General Letitia James of New York said in a statement. Joining Ms. James in the effort are the attorneys general of Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.

“We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising,” Ms. James said.

In a statement, Will Castleberry, Facebook’s vice president of state and local policy, said that the company “will work constructively with state attorneys general, and we welcome a conversation with policymakers about the competitive environment in which we operate.”

The states’ move follows similar steps by the Federal Trade Commission and the Justice Department to examine how Silicon Valley’s dominant players have accumulated market power and whether they have acted to reduce competition.

Congress is exploring the same questions, with executives from Apple, Amazon, Facebook and Google — the four companies that are the focus of the Justice Department’s review — appearing at an antitrust hearing in Washington in July. Another hearing is planned for next week.

State regulators, typically acting in tandem with federal officials, can play an important role in major antitrust investigations. That was the case in the landmark antitrust case against Microsoft, when 20 states joined the Justice Department in suing the software giant in 1998.

Unlike that case, the current antitrust issues extend well beyond a single company. The Justice Department, for example, is focused on companies that operate in, and have come to dominate, somewhat different markets, including internet search, online advertising, e-commerce and social networks.

For Facebook, the states’ antitrust investigation puts the social media giant in regulators’ cross hairs yet again.

In July, the Federal Trade Commission voted to fine the company about $5 billion for mishandling users’ personal information, the agency’s largest fine ever against a tech company. Also in July, Facebook officials faced two days of grilling in Congress over a new cryptocurrency initiative called Libra.

The state antitrust investigation could move in many different directions. It might, for instance, align with the trade commission’s inquiry, which is focused on whether what critics have called Facebook’s “program of serial defensive acquisitions” was used to maintain the company’s dominance in the social networking industry.

Facebook bought Instagram, the photo-sharing network, for $1 billion in 2012. Just two years later, Facebook spent $19 billion for WhatsApp, a global-messaging application used by more than a billion people.

Critics believe that long before either acquisition, Mark Zuckerberg, a founder of Facebook and its chief executive, kept a close eye on start-ups that could pose a threat to his company. Facebook has acquired more than 70 companies over roughly 15 years.

This is a developing story. It will be updated.