Facebook under investigation by 47 states as Zuckerberg prepares to face Congress
As Facebook's CEO prepares to face Congress, the push to break up the company appears to have reached a fever pitch. A probe by state attorneys general to investigate possible antitrust abuses now counts 47 participants, New York Attorney General Letitia James said Tuesday.
The probe is bipartisan, with New York, Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia acting as leads, James said in a press release. The mission: To examine whether "Facebook may have put consumer data at risk, reduced the quality of consumers' choices and increased the price of advertising," James said. The investigation launched last month with just eight jurisdictions participating.
The 39 states — including eight that are not named because they "cannot confirm their participation in pending investigations," James said — are likely emboldened by the increasingly anti-tech stance of the U.S. Department of Justice, whose antitrust chief, Makan Delrahim, said earlier Tuesday that breaking up the big tech companies was "perfectly on the table," according to the Wall Street Journal.
Facebook founder and CEO Mark Zuckerberg will likely receive many questions about the company's dominance and privacy practices when he addresses Congress members Wednesday about another controversial topic: The company's planned Libra cryptocurrency.
Zuckerberg plans to tell the House Financial Services Committee that Libra won't launch anywhere in the world unless all U.S. regulators approve, according to prepared remarks that Facebook released Tuesday. This is a stronger statement than Facebook official David Marcus, who leads the Libra project, made in July, when he said Facebook will not offer Libra until it has "fully addressed regulatory concerns and received appropriate approvals."
"Facebook will not be a part of launching the Libra payments system anywhere in the world unless all U.S. regulators approve it. And we support Libra delaying its launch until it has fully addressed U.S. regulatory concerns," Zuckerberg's statement says.
"I believe this is something that needs to get built, but I understand we're not the ideal messenger right now. We've faced a lot of issues over the past few years," it reads, noting that a digital currency, intended for people who can't access bank accounts, dovetails with the company's mission of empowering people.
Libra has faced intense pushback from U.S. and European regulators over concerns the virtual currency could be used to sidestep financial laws. The project has lost seven of its original 28 partners in recent weeks, including PayPal, Visa and Mastercard. That likely pushes any release date deeper into 2020, Wedbush analysts wrote in a note.
"Realistically, it is unlikely Facebook can succeed without partner support, as the company lacks the infrastructure to handle a project of this magnitude in our opinion," they said.
"While officially tomorrow's hearing is about the cryptocurrency initiative Libra for Facebook, we fully expect politicians to use this forum as another major shot across the bow on broader antitrust concerns," they added.
The Associated Press contributed reporting