Facebook’s Crypto Scheme Triggers Massive Regulatory Backlash – CCN Markets
Following reports earlier today that dozens of state attorney generals were set to officially commence antitrust investigations into Big Tech behemoths Facebook and Google, New York Attorney General Letitia James confirmed that at least one of the companies would indeed face government scrutiny.
Unsurprisingly, it’s the one that recently revealed its ambitious – and controversial – plans to launch its own cryptocurrency.
New York Sinks Its Teeth Into Scandal-Ridden Facebook
Attorney General James officially confirmed the matter by issuing the following statement:
“Even the largest social media platform in the world must follow the law and respect consumers. I am proud to be leading a bipartisan coalition of attorneys general in investigating whether Facebook has stifled competition and put users at risk. We will use every investigative tool at our disposal to determine whether Facebook’s actions may have endangered consumer data, reduced the quality of consumers’ choices, or increased the price of advertising.”
As the statement explains, Attorney General James is not the only legal authority that will be investigating Facebook. She will be joined by the attorney generals from seven other states and the District of Columbia.
At the time of this writing, a similar investigation into Alphabet’s Google division has not been confirmed.
Facebook: A History of Privacy Scandals
The impending battle between state legal advisors and Facebook is one in a long line of conflicts between government authorities and the social media giant that began with the infamous Cambridge Analytica scandal.
Failure to safeguard user data has been something of a theme for Facebook in recent years — and months. Only yesterday, it was reported that the company leaked 419 million users’ phone numbers.
The company has also been accused in the past of providing the Federal Bureau of Investigation and National Security Agency essentially-unfettered access to its servers — though both sides have claimed proper legal processes are always enforced.
Reading Between the Lines: The Role of Crypto Project Libra
The government is also largely displeased with Facebook’s plans to launch its own “cryptocurrency,” named Libra. Lawmakers have called for the social media company to halt the development of its essentially-private currency amid wider concerns that Facebook is unable to properly manage its power over society and should not gain even more information on individuals’ spending habits.
Following the announcement of Libra, legislators hammered Facebook for being too audacious in the face of ever-mounting privacy issues. It is not difficult to interpret today’s announcement of an antitrust investigation as a response to Facebook’s attempt at undermining global fiat currencies with its own self-labeled “cryptocurrency.”