Facebook Shares Fall As Most States Join Antitrust Probe; Mark Zuckerberg Goes On The Stump

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New York Attorney General Letitia James said 46 other attorneys general have joined her antitrust investigation into Facebook, adding more legal firepower to a potential lawsuit.
The Federal Trade Commission and the Department of Justice have already opened antitrust investigations. At a Wall Street Journal conference in Laguna Beach, the DOJ’s antitrust chief said that the breakup of Facebook and other tech giants is “perfectly on the table.”

As New York’s investigation continues, “We will use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition and put users at risk,” James said in a statement Tuesday. Xavier Becerra, the attorney general of California, where Facebook is based, is not part of her investigation.

Will Castleberry, Facebook’s VP of state and local policy, said that “people have multiple choices for every one of the services we provide. We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the U.S. but around the globe. We will work constructively with state attorneys general and we welcome a conversation with policymakers about the competitive environment in which we operate.”

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With clouds gathering on the horizon, shares in the social networking giant slumped 4% to end Tuesday’s session at $182.34. They have remained remarkably resilient in 2019 despite regular doses of downbeat news, rising 32% as the company continues to deliver strong financial results. Facebook will report its third-quarter earnings on October 30 and many analysts are looking for it to provide an upside surprise.

Issues across a wide spectrum have hit Facebook in recent days, everything from the bumpy rollout of its Libra currency to riots in Bangladesh linked to a Facebook post to continuing heat over the company’s role in elections. Last week, at Georgetown University, founder and CEO Mark Zuckerberg doubled down on the company’s plan to continue carrying political content.

At Tuesday’s Wall Street Journal Tech Live conference, DOJ antitrust chief Makan Delrahim said regulators will assess consumer harm but not look to punish companies strictly according to size. “Big is not bad,” he said. “Big behaving badly is bad.”

Sen. Elizabeth Warren (D-Mass.) has called for Facebook to be broken up, while other 2020 presidential candidates have criticized the platform’s data and privacy practices.

As the company has become a political target on many fronts, Zuckerberg has been on a media blitz, sitting for an interview last week with Fox News’ Dana Perino, and on Monday with NBC News’ Lester Holt.

Zuckerberg has defended the company’s decision to let political ads on its platform without fact checking, as a number of broadcast and cable outlets do.

“I believe that it is important for people to be able to hear and see what politicians are saying,” Zuckerberg told Holt. “I think that when they do that, that speech will be heavily scrutinized by other journalists, other people.”

Facebook Chief Technology Officer Mike Schroepfer said at the Journal conference that political ads are “not a big part of our business” and “probably not worth the scrutiny and the criticism we’re getting for it.” Even so, Facebook is committed to smoothing out its process with the goal of serving as a viable and democratic alternative to vastly more expensive TV buys. “We’re working through this live and with the public,” he said.

Zuckerberg told Holt he is “confident” in the platform’s effort to take down content that are disguised attempts by foreign actors to interfere in another country’s elections. On Monday, the company announced that it had taken down four separate networks of accounts, including ones that were linked to Russia and that attacked former Vice President Joe Biden.

“That we’ve been able to proactively identify [the fake accounts] and take them down is somewhat of a signal that our systems are much more advanced now than they have been in the past,” Zuckerberg said.

After the announcement, Biden sent out a fundraising tweet, saying, “The Russian trolls are back — and this time, they’re going after my campaign. We cannot let 2016 repeat itself.”

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