California Makes Noise About Antitrust Probe Into Auto Emissions Deal, Stays Mum on Tech
The U.S. Department of Justice is questioning a deal between California and four automakers to increase fuel efficiency while tech companies are coming under scrutiny from other states' attorneys general.
September 06, 2019 at 06:29 PM
4 minute read
The original version of this story was published on The Recorder
As California leaders continue to tout the state's rigorous environmental standards and booming tech economy in the face of hostility from the Trump administration, they suddenly find themselves oddly positioned in three high-profile antitrust actions.
On Friday the U.S. Department of Justice announced that it will investigate California's deal with four automakers to increase fuel efficiency standards beyond those sought by federal regulators. The voluntary pact with BMW, Ford, Honda and Volkswagen is aimed at reducing tailpipe emissions even as the Trump administration attempts to roll back Obama-era pollution standards.
In a Sept. 6 letter to California Air Resources Board Chairwoman Mary Nichols, general counsel from the U.S. Department of Transportation and the U.S. Environmental Protection Agency urged Nichols to "immediately … disassociate" her agency "from the commitments made by the four automakers."
The agency's "actions in furtherance of the framework appear to be unlawful and invalid," Steven Bradbury of the DOT and Matthew Leopold of the EPA wrote. "We recognize California's disagreement with the federal government's policy proposals in this area, but those policy agreements cannot justify CARB's pursuit of a regulatory approach that would violate federal law."
State officials immediately fired back against the collusion allegations with Gov. Gavin Newsom tweeting that he'd see President Donald Trump "in court."
"The US Department of Justice brings its weight to bear against auto companies in an attempt to frighten them out of voluntarily making cleaner, more efficient cars and trucks than EPA wants," Nichols said in a prepared statement that referenced the U.S. EPA administrator. "Consumers might ask, who is Andy Wheeler protecting?"
While state leaders' response to the federal threat is familiar—California has pursued more than 50 legal actions challenging Trump administration policies—their reaction to current and threatened lawsuits challenging the Golden State's tech industry has been far more muted.
State attorneys general from eight states and the District of Columbia on Friday announced an investigation into Facebook for possible antitrust violations following a $5 billion fine leveled against the social media company for allegedly mishandling its users' personal data.
A statement issued by New York Attorney General Letitia James said the inquiry will focus on Facebook's "dominance in the industry and the potential anticompetitive conduct stemming from that dominance."
Another, larger group of attorneys general Monday are expected to announce an antitrust investigation into Google, and possibly other tech companies, The Washington Post reported.
California Attorney General Xavier Becerra's office would not say if he planned to join either of the legal actions.
"California remains deeply concerned and committed to fighting anticompetitive behavior," Becerra said in a statement released by his office. "Regarding this investigation or any other, to protect the integrity of potential and ongoing investigations, we cannot provide comment."
California leaders have championed Silicon Valley, a major driver of the state's economy. Tech companies, in turn, have made healthy donations to state Democrats and their party. Records filed with the secretary of state show that Facebook contributed $50,000 to Newsom's re-election campaign in June. Google gave $29,200 to the governor last year.
Becerra, who received $7,300 from Google last year, according to filings, has been more openly critical of tech companies' actions—particularly in regards to data privacy—than Newsom. He supported unsuccessful amendments to the California Consumer Privacy Act that would have allowed consumers to directly sue companies such as Facebook and Google for mishandling their personal data.
"The industry is no longer a baby," Becerra said at a Washington Post forum in March. "It's time to treat the industry as an adult. So you have to act like an adult, and you have to understand there are consequences that adults face when they don't do things the right way."
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