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  • For Facebook and Google, the threat of breakup

  • has become a lot more real over the last couple of weeks.

  • First up, we had to Letitia James, the state attorney

  • general for New York, saying that she

  • was leading a group of eight other state

  • AGs in an investigation into whether Facebook

  • has been exploiting its market dominance.

  • Then Google said it was under investigation

  • by the Department of Justice for similar concerns.

  • And then we had Ken Paxton, the Texas State AG,

  • saying he was leading a group of 50 state and territorial

  • AGs also looking into potential anti-competitive practises

  • at Google.

  • So what does all this mean, and how seriously

  • should these companies take these investigations?

  • Well, the first thing to say is that we're

  • a long way from any potential breakup of either company.

  • It took nine years, for example, for officials from the Federal

  • Trade Commission between bringing

  • that famous case against Microsoft

  • and eventually reaching a settlement with them in 2001.

  • However, that doesn't mean that these companies shouldn't

  • take this process seriously.

  • Once things like this get started,

  • they often take on the momentum of their own.

  • And it is particularly worth watching what

  • is going on at a state level.

  • These state AGs are seeking to prove a vital legal point.

  • They argue that consumers are being

  • harmed by Facebook and Google's dominant market positions,

  • not by raising prices, because, of course,

  • their services are free for users,

  • but in a variety of other ways, such as increasing advertising

  • fees or by exploiting customers by rating their data.

  • If these AGs are successful in arguing this legal point,

  • it will be a vital piece of ammunition

  • for those who do seek to eventually

  • break these companies up.

For Facebook and Google, the threat of breakup

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