US opens anti-trust investigation into big-name tech companies

THE US Department of Justice has opened an investigation into whether companies such as Amazon, Facebook and Google have “stifled innovation” by thwarting competition unlawfully.

The department’s anti-trust division did not name the companies but announced last night that it was reviewing market-leading “online platforms” to see how they have come to power and whether they engaged in illegal practices that reduced competition and made it difficult for smaller companies to thrive.

The investigation raises the prospect that the companies could be fined, forced to change their business models, or in an extreme scenario, broken up.

The Justice Department said it had received a number of complaints against big tech companies that include allegations surrounding search, social media and retail services.

The investigation signals increasing anti-technology rhetoric in Washington, which had long been considered an ally of Silicon Valley. President Donald Trump has repeatedly accused technology companies of bias against Conservatives, and presidential hopeful Elizabeth Warren has pushed for the break up of large tech companies, which critics say have avoided the scrutiny of the law for too long. There have been concerns over Facebook, which operates Whatsapp and Instagram, and Google-owner Alphabet, which owns numerous different companies across different industries.

Assistant Attorney General Makan Delrahim of the department’s anti-trust division said: “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands. The department’s anti-trust review will explore these important issues.”

In Europe, Google has already been dealt three anti-trust fines from the EU totalling €8.2bn (£7.4bn) in the past three years. It found that Google abused its dominance in the smartphone market through its operating system, Android, and that it forced its Adsense customers to use only Google’s services. The European Commission also found it was unfairly promoting preferred retailers on Google Shopping.

A Google spokesman pointed The Telegraph to the testimony of Adam Cohen, director of economic policy, during a US hearing last week.

Mr Cohen had said: “In the face of intense competition, we are proud of our record of continued innovation. We have helped reduce prices and expand choice for consumers and merchants in the US and around the world.

Shares in Facebook, Amazon and Alphabet fell between 1pc and 1.6pc after the news.