U.S. starts antitrust inquiries of big tech companies
The Justice Department said it’s investigating whether big technology companies are thwarting competition in their markets, stepping up scrutiny of the industry’s biggest names as they come under fire in Washington.
The department’s antitrust division will look at concerns that consumers, businesses and entrepreneurs have expressed about search, social media and online retail, according to a statement Tuesday. The statement didn’t name any companies.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Makan Delrahim, the head of the department’s antitrust division. “The department’s antitrust review will explore these important issues.”
The announcement marks the latest sign of the escalating scrutiny facing tech companies in Washington from lawmakers and antitrust enforcers. The giants of the industry are under fire over extensive collection of user data, failing to police content on their platforms, and claims that they are harming competition and reducing choices for consumers.
President Donald Trump has railed against many of the biggest names in the industry, contending they suppress conservative viewpoints.
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 Chief Executive Officer Tim Cook, who told CBS last month he doesn’t think “anybody reasonable” would call Apple a monopoly.
“We ultimately believe this is more noise versus the start of broader structural changes across the tech food chain,” said Webush analyst Daniel Ives, writing in a note with three other analysts. He said the inquiry “will likely result in business model tweaks and potential [Justice Department/trade commission] fines in a worst-case scenario, rather than forced breakups of the underlying businesses.”
Last week, executives from the four companies were grilled by the House antitrust panel, which is investigating whether dominant companies are thwarting competition and harming innovation.
On Tuesday, the chairman of that committee, Democrat David Cicilline of Rhode Island, sent follow-up questions to Facebook, Amazon and Google, saying he was “deeply troubled” by the companies’ “evasive, incomplete, or misleading answers.”
The Justice Department move, first reported by The Wall Street Journal, comes after the antitrust division and
the Federal Trade Commission took early steps toward investigating the four companies, with the Justice Department taking oversight of Google and Apple and the FTC getting Facebook and Amazon.
The Justice Department’s move followed the FTC’s decision in February to form a tech task force to examine conduct by companies and past deals in the industry.
One antitrust expert believes the Department of Justice investigation may prompt regulators to interpret U.S. competition law in new ways.
University of Pennsylvania law professor Herbert Hovenkamp said the companies may have been abusing their 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 to block only 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.