The U.S. Justice Department intends to investigate Facebook Inc. after prodding from U.S. Attorney General William Barr, according to a person familiar with the matter, even though the Federal Trade Commission already has an inquiry underway.
The social-media giant now faces parallel probes by two federal agencies over whether it has harmed competition in violation of antitrust laws.
The Justice Department’s case will focus on conduct that’s separate from what the FTC is examining, said the person, who declined to be named because the matter is confidential. The two federal inquiries are in addition to investigations by state attorneys general and the House Judiciary Committee.
The simultaneous Facebook probes are a departure from the agencies’ usual practice of dividing up scrutiny of companies based on staff expertise. They share antitrust enforcement power and often hammer out so-called clearance agreements, some of which can involve considerable behind-the-scenes wrangling, to avoid overlap.
The FTC began its investigation of Facebook after striking an agreement in May with the Justice Department to divide four of the biggest tech companies between them. Under that deal, the FTC got jurisdiction over Facebook and Amazon.com Inc. while the Justice Department’s antitrust division took Alphabet Inc.’s Google and Apple Inc.
That agreement has now been overridden after Barr pushed to retain jurisdiction over Facebook, the person said. The agreement with the FTC didn’t cover all conduct by the four companies, according to two people familiar with the matter. The Justice Department could also look at some of Amazon’s business practices, one of the people said.
Justice Department officials feel obliged to carry out the department’s mandate to enforce antitrust laws, especially given the widespread concerns over tech platforms, according to a third person familiar with the matter.
FTC Chairman Joe Simons believes the Justice Department is infringing on its territory and wrote a letter to the department about the issue, according to one of the people. The Justice Department responded with its own letter, another person said. The FTC’s letter was previously reported by the Wall Street Journal.
The FTC and Facebook declined to comment.
Signs of the Justice Department’s interest in Facebook first emerged publicly at the end of July, when it announced a broad review of large technology platforms. While the department said it was looking at “social media,” it didn’t specify any companies. Facebook disclosed that investigation to investors a few days later, without specifying whether it was a target.
That July announcement followed a meeting between the FTC’s Simons and top Justice Department officials, including Barr, who expressed interest in looking at Facebook conduct, said the person.
By then, the FTC was already forging ahead with its Facebook case. The agency is looking at social media, digital advertising and mobile applications, according to a Facebook disclosure.
The jurisdictional dispute spilled into public view last week during an oversight hearing on Capitol Hill. Republican Senator Mike Lee of Utah told Makan Delrahim, the Justice Department’s antitrust chief, and the FTC’s Simons that he was concerned about how they were dividing scrutiny of the tech companies.
“It sounds like your agencies may be pursuing monopolization investigations of the same companies at the same time,” he said. “Now, let me be clear, I don’t think your agencies should be divvying up parts of a monopolization investigation of the same company -- tech company or, otherwise.”
Both Simons and Delrahim acknowledged that there had been disagreements.
“I cannot deny there are instances where Chairman Simons’ and my time is wasted on those types of squabbles,” Delrahim said.
--Bloomberg News
