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Why a widening Facebook probe could be 'good news' for Zuckerberg

More state AG's looking into Facebook could actually be 'good news,' former FTC official says Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Facebook (FB) CEO Mark Zuckerberg is defending his company, and its plans to help launch a new cryptocurrency, before&nbsp;skeptical members of Congress&nbsp;from both parties Wednesday.” data-reactid=”15″>Facebook (FB) CEO Mark Zuckerberg is defending his company, and its plans to help launch a new cryptocurrency, before skeptical members of Congress from both parties Wednesday.

But the latest twist in the effort to investigate – and potentially break-up – Facebook may actually be good news for the social networking giant.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On Tuesday, New York Attorney General Letitia James&nbsp;announced&nbsp;colleagues from 47 U.S. states and territories are now part of that state’s antitrust investigation into Facebook. That’s on top of a wider probe by the Justice Department and Federal Trade Commission.” data-reactid=”17″>On Tuesday, New York Attorney General Letitia James announced colleagues from 47 U.S. states and territories are now part of that state’s antitrust investigation into Facebook. That’s on top of a wider probe by the Justice Department and Federal Trade Commission.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“I actually think it’s good news for Facebook,” John Yun, the director of economic education at George Mason University’s Global Antitrust Institute, told Yahoo Finance’s&nbsp;The First Trade. “I think it actually shows that these states are having trouble finding a theory of harm.”” data-reactid=”18″>“I actually think it’s good news for Facebook,” John Yun, the director of economic education at George Mason University’s Global Antitrust Institute, told Yahoo Finance’s The First Trade. “I think it actually shows that these states are having trouble finding a theory of harm.”

Yun, who formerly served as an Acting Deputy Assistant Director in the FTC’s Antitrust Division, said the overwhelming push to break up Facebook may be running into roadblocks now, with investigators struggling to find the right path to follow.

Facebook Chairman and CEO Mark Zuckerberg testifies before the House Financial Services Committee on “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors” in the Rayburn House Office Building in Washington, DC on October 23, 2019. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

“If they need to bring in antitrust experts to really help them navigate and determine the best path forward, that means they’re really finding very little,” he told Yahoo Finance.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="That doesn’t mean the concerns over Facebook’s activities aren’t real. Over the summer,&nbsp;Facebook was hit with a $5 billion fine&nbsp;by the Federal Trade Commission over privacy practices.” data-reactid=”32″>That doesn’t mean the concerns over Facebook’s activities aren’t real. Over the summer, Facebook was hit with a $5 billion fine by the Federal Trade Commission over privacy practices.

Privacy may be at the heart of the worries over Libra too, Yun said.

“What they’re really concerned about is privacy and violations of consumers rights, and will Libra just be another avenue for Facebook to potentially create more data and more profiles on their users,” he said.

As for the state attorneys general, though, trying to build a case that Facebook stifled innovation may be tougher.

“The agencies have vigorously looked at these behaviors by Facebook and they’ve come up empty to this point,” Yun said. “The state AG’s coming and trying to find something new, I’m not surprised they’re struggling.”

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="‘You don’t need Libra’: Central bankers skeptical of Facebook cryptocurrency” data-reactid=”40″>‘You don’t need Libra’: Central bankers skeptical of Facebook cryptocurrency

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”41″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.” data-reactid=”42″>Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.

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