SCOTT SIMON, HOST:
Attorneys general across the United States have turned their attention to Google and Facebook. And this week, New York state attorney general confirmed her agency, along with seven other states and the District of Columbia, are investigating Facebook for anti-competitive practices. And Google has confirmed that it's preparing for attorneys general to probe their company.
NPR's Aarti Shahani joins us. Aarti, thanks so much for being with us.
AARTI SHAHANI, BYLINE: Thank you.
SIMON: And let's note at the top that Google and Facebook are among NPR's recent financial supporters. Let's begin with Facebook. What are the AGs looking into?
SHAHANI: So New York Attorney General Letitia James is leading a bipartisan group, Dems and Republicans. They're investigating a few things. One is Facebook playing fast and loose with consumer data. Two billion-plus users - that would be about a quarter of the population of Earth - created accounts, trusted the company. We now know Facebook turned around and offered outsiders access to user data - groups like Cambridge Analytica and also Netflix and Airbnb. Facebook, by being the central repository of user data, put itself in a position of power to get even bigger and more powerful and possibly violating privacy along the way.
Question two is whether Facebook's dominant position is harming consumer choice. Here's an example of that. The company announced over the summer that it plans to make its own digital currency, a way for people to pay each other and buy things online. The service would put Facebook in competition with credit card companies, money transfer agencies, like Western Union, and a handful of small, scrappy startups already working on this kind of financial technology. So given Facebook's scale, it could easily stomp out the competition not because it's better, not based on the merit, just because it's big.
SIMON: And what about the issues with Google?
SHAHANI: Well, with Google, the details haven't been disclosed. But the obvious issues are Google dominates search. It has the power to put you on Page 1 or 100. And, along with Facebook, it's got control over mobile advertising. You know, we don't typically think of advertisers as a group of concerned citizens, but they are. Whether you're running for city council or you own an ice cream store or you run a Fortune 500 company, you are paying Facebook and Google to reach customers. And that means these two companies can set the price, change the rules, call the shots. Now, back in the pre-digital media era, there wasn't just one or two free TV stations that sold all the ads. There were several free stations.
SIMON: Aarti, we're seeing increasing government action around digital companies, aren't we? Do you expect that to continue?
SHAHANI: Yeah, Scott, I think so. And it's because we're entering a new chapter in history, really. I mean, we're entering the data economy - the companies that own the information, that set the price, that can wipe out entire industries, that can, you know, control what we believe is the truth.
I spoke with one of the attorney generals involved in the Facebook investigation, AG Phil Weiser of Colorado. And he says, look; a handful of these companies say, we can regulate ourselves, but he makes the case the government can't take their word for it that they're protecting consumer data.
PHIL WEISER: If we don't act at all and bad things happen, shame on us for not being vigilant protectors of consumers. There are times where the failure to take action can lead to all sorts of problems, and we see here a real interest in making sure that we're not just giving companies an automatic pass, but we're taking a hard look.
SHAHANI: You know, I point out that some critics say that tech CEOs need to be held accountable personally. For example, Mark Zuckerberg was never deposed, scrutinized, before his company entered into a settlement with federal regulators. I asked Weiser if the AGs would depose the CEO, and he said that while he couldn't spell it all out, he's promised that his investigation would be complete.
SIMON: NPR's Aarti Shahani, thanks so much.
SHAHANI: Thank you. Transcript provided by NPR, Copyright NPR.