New York attorney general candidate Zephyr Teachout promised Wednesday to “explore breaking up” Facebook and Google if she is elected, using state and federal antitrust laws.
Standing in front of the Manhattan offices of the New York Daily News, Teachout said tech companies are to blame for dominating the online advertising market — drawing revenue from newspapers and publishers. Teachout’s remarks came a day after the Daily News in New York announced layoffs that reduced the size of its newsroom by half.
“As attorney general," Teachout said, "I would work with my colleagues in other states to launch a major antitrust investigation to look into the ways in which Facebook and Google are wielding and may be abusing their duopoly powers.”
Teachout’s campaign promise brings a national debate about competition and monopoly to a contested four-way race for one of the most powerful law enforcement positions in the United States. Along with California, New York is widely viewed as a leader on consumer protection issues, given the size of its population and the zeal with which its attorneys general have pursued litigation against allegedly misbehaving companies.
That could lead to increased risks for the tech industry as it seeks to weather a barrage of bipartisan criticism in Washington. On Monday, President Trump tweeted that “many feel” Amazon.com, the online retail giant, deserves to be investigated for antitrust claims. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.) And Rep. Keith Ellison (D-Minn.) called on the Federal Trade Commission last month to investigate Google.
Elsewhere, Missouri Attorney General Josh Hawley on Wednesday announced an expansion of his office’s antitrust probe into Google. Hawley served a new subpoena as part of his investigation into whether the search giant may have taken “improper steps to enhance its market power.” Hawley cited the European Union’s recent $5 billion fine against Google for bundling its proprietary apps on Android phones in what the E.U. said was an anti-competitive fashion.
“If the European commission’s allegations are true, Google’s conduct may have violated both federal and state antitrust laws,” Hawley said in a statement.
Google and Facebook’s power in the advertising market represent a “democratic crisis” for journalism, Teachout said in an interview Wednesday.
Facebook declined to comment. Google didn’t immediately respond to a request for comment.
Beyond a probe into the top tech platforms, Teachout, a Democrat, said her plan will include blocking new mergers and acquisitions by the tech companies that she said cut off innovation and competition. She promised to use federal laws such as the Clayton Act and state statutes such as the Donnelly Act to prosecute monopolistic behavior. And she said she could examine even completed acquisitions for targeted “unwinding.”
The cuts at the Daily News appeared to have little to do with the tech platforms directly; instead, the layoffs stemmed from business decisions by the paper’s parent company, Tronc. But Teachout said the “decimation” of local newspapers such as the Daily News reflects a broader economic reality for publishers.
“People are making money off of local news,” she said. “But it isn’t the journalists, and it isn’t the publishers. It’s Facebook and Google.”
Facebook and Google account for a majority of the U.S. digital ad market — an estimated 56.8 percent, according to the research firm eMarketer. But that dominance may be slipping, eMarketer said, as companies such as Amazon and Snap gain market share.
Some antitrust experts said newspapers are helped, not hurt, by tech companies that distribute their content to large online audiences. And, they said, some outlets' financial woes can be traced to the proliferation of competing sources of information, such as blogs and new online publications.
“Papers that are struggling are those that can’t compete with a much expanded market or that refuse to enter the digital age,” said Geoffrey Manne, executive director of the International Center for Law and Economics, a Portland, Ore.-based think tank. “But this idea that a Facebook/Google ‘duopoly’ is to blame is simply wrong. This is pure politics.”
Whether Teachout could, if elected, successfully use antitrust law against the tech industry would largely depend on the courts.
Any lawsuit that might lead to the breakup of Facebook or Google would need to prove anti-competitive effects on specific markets. That could pose a significant challenge for proponents of a more aggressive antitrust agenda. Federal officials to date have been reluctant to go after Silicon Valley companies, said Diana Moss, executive director of the American Antitrust Institute.
Still, she said, “complex markets should not discourage enforcers — the laws and standard are capable and adequate.”