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Bad Day for Facebook and Big Tech

BERLIN, GERMANY - FEBRUARY 24:  A visitor holds a paper coffee cup adorned with the Facebook logo at the Facebook Innovation Hub on February 24, 2016 in Berlin, Germany. The Facebook Innovation Hub is a temporary exhibition space where the company is showcasing some of its newest technologies and projects.  (Photo by Sean Gallup/Getty Images)
By William Vogeler, Esq. on June 04, 2019

Facebook had a bad day in court involving its biggest data breach. Add a multi-targeted investigation by federal regulators, and it was a really bad day.

The Department of Justice and the Federal Trade Commission are investigating whether Facebook, Google, Apple, and Amazon have violated antitrust laws. The Wall Street Journal broke the story, reporting that the DOJ will scrutinize Google and Apple, while the FTC will look into Amazon and Facebook.

It's nervous time for the tech titans, but legal experts say they'll survive. Facebook, however, had a terrible, horrible, no good, very bad day. With all the news, its stock fell more than six percent.

Cambridge Analytica

By now, some people may have forgotten that the social media giant had an epic problem with some 87 million Facebook accounts. Now Washington DC's attorney general is suing the company, alleging it improperly allowed the political consulting firm to harvest users' data.

Facebook asked the trial court to dismiss or stay the proceedings, but the judge declined. On the same day, a judge in Delaware ordered the company to turn over emails and other records on its handling of data privacy in a separate case.

Meanwhile, the House Judiciary Committee announced it is also investigating possible antitrust violations by Facebook and the other tech giants. Critics say the government has been slow to address the issue. "The house is burning down here, and you guys are watering the rose bushes in the backyard," observed Georgetown law professor William Kovacic, who is a past chairman of the FTC. The critics want them to: "Put out the fire."

'Put Out the Fire'

Legal experts acknowledge the outcry for action, but say antitrust investigations typically take at least a year. No to mention, the tech giants have survived government inquiries before.

In 2013, the FTC closed an antitrust investigation of Google. The agency concluded the company "took aggressive actions to gain advantage over rival search providers." However, the FTC said, Google did not break the law.

Douglas Melamed, a Stanford law professor and former acting assistant attorney general for the DOJ, said the investigations may amount to fines or agreements to change business practices. But they will not threaten the breakup of Big Tech. "I don't think anyone is going to be able to prove the success of these platforms is a threat to any competition," he told Fortune.

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