Will Big Tech have to pay up to resolve federal probes?
Tech giants are facing greater legal risks than ever before, opening up the possibility that they may have to pay big money to resolve probes alleging unfair business practices against them.
Coming under increased scrutiny Friday were Facebook and Alphabet Inc.’s Google unit. Separate antitrust probes into the two big tech firms are expected to start as early as Monday, according to The Wall Street Journal.
Dozens of attorneys general are allegedly joining the effort and, according to the Journal, attorneys general are often able to extract large fines regarding antitrust cases.
This comes just after both companies were already ordered to pay hefty fines in two sperate settlements.
The recent move to rein in the big tech businesses comes on the heels of a fine that set Facebook back billions of dollars this past summer.
In July, Facebook was ordered to pay $5 billion in a settlement with the Federal Trade Commission over an investigation into the company’s privacy missteps. The settlement to resolve the government probe was the largest penalty imposed on a tech company.
However, the payday was considered a slap on the wrist in comparison to their second-quarter revenue of $16.89 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FB | NO DATA AVAILABLE | - | - | - |
Meanwhile, Google faced its own penalty this week when YouTube was ordered to pay a $170 million fine to settle allegations that it illegally collected children's personal information without parental consent.
"The settlement requires Google and YouTube to pay $136 million to the FTC and $34 million to New York for allegedly violating the Children's Online Privacy Protection (COPPA) Rule. The $136 million penalty is by far the largest amount the FTC has ever obtained in a COPPA case since Congress enacted the law in 1998, " the FTC said in a press release.
But in the most recent case, there may be more at risk than a potentially hefty fine for Google.
In the antitrust probe, expected to be formally announced Monday, against Google's parent company, digital ads are being investigated for lack of transparency. And according to Reuters, Alphabet generates about 85 percent of its revenue from tools used in online advertising or the ad space itself.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOGL | ALPHABET INC. | 171.49 | +2.54 | +1.50% |