Tech companies may have found their most formidable opponents yet


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Texas Attorney General Ken Paxton, center, with District of Columbia Attorney General Karl A. Racine, left, and a bipartisan group of state attorneys general, speaks Sept. 9 in front of the U.S. Supreme Court on an antitrust investigation of big tech companies. (Manuel Balce Ceneta/AP)

September 12 at 5:22 PM

Richard Cordray served as Ohio’s attorney general from 2009 to 2011 and was the first director of the Consumer Financial Protection Bureau from 2012 to 2017.

Tech companies may have found their most formidable opponents: state attorneys general.

In the past week, nine attorneys general have joined to examine whether Facebook has engaged in anti-competitive practices, such as stifling competitors or increasing the price of advertising. And 50 announced an investigation into potential monopolistic behavior by Google, which will likely include scrutiny of its search and advertising businesses.

These investigations come against a backdrop of existing regulatory activity by the federal government and European antitrust authorities that continues to ramp up. But the states’ growing interest in reviewing the antitrust practices of the largest tech firms is particularly bad news for the companies. Having so many officials on the case means the investigation will take on a life of its own and will outlast any federal administration — meaning Facebook and Google’s legal headaches won’t be solved any time soon.

It is important to recognize that each state has its own antitrust authority that is distinct from federal authority. For more than a century, state attorneys general have enforced the law against uncompetitive practices that occur within their borders. Sometimes these are local issues. Sometimes they are local manifestations of national issues, as when Ohio, during my term as attorney general, challenged the merger of Continental and United Airlines to secure concessions that saved jobs and flights at Cleveland Hopkins International Airport.

But larger national or multinational companies are often too big for a single state attorney general to keep them in check. The resources needed to pursue such investigations are massive, and in-depth investigations may stretch well beyond the term of a single official. This is not a new phenomenon. The Standard Oil Co. lost its first antitrust suit in Ohio in 1892, but it was not until 1911 that the U.S. Supreme Court finally issued the decisive order that required the company’s dissolution.

When state attorneys general band together, however, they are an imposing force. By pooling their resources and persevering, even as some in their ranks are replaced by others, they can build and maintain the pressure to get results against the most powerful companies. Antitrust claims were part of the fierce war waged by more than 40 state attorneys general who reached the historic settlement against the big tobacco companies. And the 21 state attorneys general who tried the Microsoft antitrust case alongside the Justice Department — their first sally against the big tech companies — helped produce a tough courtroom victory that changed the company’s behavior.

Facebook and Google should expect the entry of the state attorneys general to bear similar influence on these current matters. The involvement of the states is not merely additive but will transform those existing inquiries in unpredictable ways. In the years ahead, it is likely that state investigators will turn up new evidence, find new witnesses, develop new legal support, propose new arguments, devise new claims, fashion new remedies and shape new strategies that affect the timing and direction of the federal and international investigations. The confluence of their many different elements makes these coalitions harder to read and harder to control.

Even more important, the public commitment by the state attorneys general creates other dynamics that are more challenging for the companies. Instead of focused discussions with a single party — be it the Justice Department or the Federal Trade Commission — to persuade or dissuade them on any point, the companies will have to contend with multiple parties. Any decision by federal officials (even the president) to stand down or soften their approach can no longer be counted on to dictate the actual result.

We have seen this same dynamic at work elsewhere in this administration, where state attorneys general are challenging federal actions — or filling the void — to affect the direction of policy in the areas of environmental protection, health care and consumer protection. Federal officials seem sincere in undertaking a vigorous review of the tech industry. But with state attorneys general stepping into the arena as well, we now have an important new backstop to make sure they do.

Read more:

The Post’s View: In their antitrust probe, enforcers will have to do more than show us Google is powerful

The Post’s View: The Justice Department’s antitrust investigation is cause for caution

Fiona Scott Morton: Why ‘breaking up’ big tech probably won’t work

Megan McArdle: Why ‘break up big tech’ will work better as a Warren campaign theme than as an actual policy

Hugh Hewitt: To regulate ‘Big Tech,’ we need prudence, not politics