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theodore M I R A L D I mpa ... editor, publisher, writer
Wednesday, July 24, 2019
DOJ Launches ANTITRUST Probe Into Big Tech Companies
Getty Images Nicolas Vega
The Justice Department announced Tuesday that it is launching a probe into big tech companies’ efforts to reduce competition and stifle innovation— raising the heat on an already-embattled industry.
The DOJ’s antitrust division will determine whether “market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers,” it said in a press release.
Though the department did not single out any specific company, the reviews will focus on Facebook, Google, Apple and Amazon, according to the Wall Street Journal.
Shares of Amazon and Facebook both dipped close to 1.5% in late trading following the news. Apple and Google parent Alphabet were down 0.4% and 0.9%, respectively.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Makan Delrahim, head of the DOJ’s antitrust team, said in a statement.
The department’s review will consider “the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online,” the DOJ said.
The agency has the authority to push to break up companies it finds hold too much power, like it did with AT&T in the 1980s, although that process took nearly a decade.
The DOJ crackdown comes as Silicon Valley’s top companies face unprecedented scrutiny of their business practices, including claims from President Trump that tech giants meddle with his coverage and Twitter following — and calls by presidential candidates to break up the nation’s biggest tech companies.
Facebook, meanwhile, is still facing fallout for letting British consulting firm Cambridge Analytica hoover up the personal data of nearly 90 million Facebook users leading up to the 2016 presidential election — including a record $5 billion fine from the Federal Trade Commission that is expected to be announced Wednesday.
Trump slammed Google last year for prioritizing negative coverage of him in search results and accused Twitter in April of deleting his followers.
Google has denied “a political agenda,” and Twitter CEO Jack Dorsey held an impromptu sitdown with Trump to explain that Twitter was purging spam accounts.
Democratic presidential candidate Sen. Elizabeth Warren, meanwhile, has made the breakup of big tech companies — including Google, Apple and Amazon — one of her top initiatives.
“Today’s big tech companies have too much power—over our economy, our society, & our democracy,” Warren tweeted in May. “They’ve bulldozed competition, used our private info for profit, hurt small businesses & stifled innovation. It’s time to #BreakUpBigTech.”
It’s not just US politicians and regulators that are pressuring Silicon Valley. The European Commission last week opened a formal antitrust investigation into whether Amazon uses data from independent retailers who sell on its marketplace to compete against them.
And in July, the EC slapped Google with a $4.9 billion fine for pitching its Android operating system for phones as “open” while placing restrictions on phone makers to ensure its internet browser, Google Chrome, was the only browser pre-installed on Android phones.
Apple is reportedly being probed by the EC over complaints by Swedish company Spotify that its App Store rules favor its own apps over those from competitors.
It was previously reported that the DOJ was looking into investigating Alphabet, run by Google co-founder Larry Page, and Apple for potential anti-competitive practices — while leaving probes into Facebook and Amazon to the FTC.
The DOJ’s announcement arrives a week after Trump tweeted that his administration will probe billionaire Peter Thiel’s claim that Google has “seemingly treasonous” ties with China.