Agency begins Big Tech inquiry
Silicon Valley faces antitrust scrutiny
The U.S. Department of Justice opened an antitrust investigation of big technology companies and whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.
It comes as lawmakers have called for stricter regulation or even breaking up of the big tech companies, which have come under scrutiny after a series of scandals that compromised users’ privacy.
President Donald Trump has criticized the big tech companies by name in recent months. He asserts, without evidence, that companies such as Facebook and Google are biased against him and conservative politicians.
The Justice Department did not name specific companies in its announcement.
The focus of the investigation mirrors a bipartisan probe of Big Tech undertaken by the House Judiciary
subcommittee on antitrust. Its chairman, Rep. David Cicilline, a Rhode Island Democrat, has criticized the conduct of Silicon Valley giants and said legislative or regulatory changes might be needed. He has called breaking up the companies a last resort.
Major tech companies already facing that congressional scrutiny declined to comment on the Justice Department’s probe.
Amazon had no comment. Facebook also did not have an immediate comment.
Google directed requests for comments to the testimony its director of economic policy, Adam Cohen, made to the House Judiciary Committee last week. Cohen reiterated the company’s benefits to consumers.
Apple referred to comments from CEO Tim Cook, who told CBS last month he doesn’t think “anybody reasonable” would call Apple a monopoly.
Shares of Facebook, Amazon and Apple were down slightly in after-hours trading.
One antitrust expert believes the DOJ investigation might prompt regulators to interpret U.S. competition law in new ways.
University of Pennsylvania law professor Herbert Hovenkamp said the companies might have been their abusing market power by collectively buying hundreds of startups in recent years to devour their technology and prevent them from growing into formidable rivals.
Traditionally, antitrust regulators have sought only to block acquisitions involving large companies in adjacent markets. But Hovenkamp said U.S. antitrust law is broad
enough for regulators to consider the potential damage wrought by relatively small deals, too.
Earlier, The Washington Post reported that the Federal Trade Commission will allege that Facebook misled users about its privacy practices as part of an expected settlement of its 2018 Cambridge Analytica scandal.
The federal business watchdog reportedly will find that Facebook deceived users about how it handled phone numbers it asked for as part of a security feature and provided insufficient information about how to turn off a facial recognition tool for photos.
Advertisers were reportedly able to target users who provided their phone number as part of a two-factor authentication security feature.
The FTC didn’t respond to a request for comment. Facebook had no comment.