Big Tech Faces Broad U.S. Justice Department Antitrust Probe
The U.S. Justice Department sent the strongest signal yet that it’s prepared to take on technology giants like Facebook and Google, announcing a broad antitrust review into whether the companies are using their power to thwart competition, the strongest sign the Trump administration is stepping up its scrutiny of Big Tech. .
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. It also said that the department was gathering information from the public, including industry participants who have direct insight into competition in online platforms, as well as others. “If violations of law are identified, the department will proceed appropriately to seek redress,” it added.
Google and Apple declined to comment, referring to prior statements by executives, while Facebook and Amazon did not immediately comment.
Facebook fell 1.7% in after-hours trading, while Alphabet fell 1%, Amazon was down 1.2% and Apple was 0.4% lower.
The announcement comes a day before the Federal Trade Commission is set to announce a $5 billion penalty to Facebook for failing to properly protect user privacy.
Senator Richard Blumenthal, a Democrat, said the Justice Department “must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power. Too long absent and apathetic, enforcers now must prevent privacy abuse, anticompetitive tactics, innovation roadblocks, and other hallmarks of excessive market power.”
The Justice Department said the review “is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.”
Reuters reported on May 31 that the Justice Department was preparing an investigation of Google to determine whether the tech giant broke antitrust law.
Democrats and Republicans on Capitol Hill alike are expressing growing concerns about the size of the largest tech firms and their market power. Democratic Presidential candidate Elizabeth Warren has called for breaking up companies like Amazon, Apple, Google and Facebook and unwinding prior acquisitions.
“There is growing consensus among venture capitalists and startups that there is a kill zone around Google, Amazon, Facebook and Apple that prevents new startups from entering the market with innovative products and services to challenge these incumbents,” said Representative David Cicilline, a Democrat who heads the subcommittee.
Apple CEO Tim Cook told CBS News last month that scrutiny was fair but “if you look at any kind of measure about is Apple a monopoly or not, I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly. Our share is much more modest. We don’t have a dominant position in any market.”
Google’s Adam Cohen told the House Judiciary subcommittee last week that the company had “created new competition in many sectors, and new competitive pressures often lead to concerns from rivals.”
Technology companies face a backlash in the United States and across the world, fueled by concerns among competitors, lawmakers and consumer groups that they have too much power and are harming users and business rivals.
U.S. President Donald Trump has called for closer scrutiny of social media companies and Google, accusing them of suppressing conservative voices online, without presenting any evidence.
Senator Marsha Blackburn, a Republican, praised the investigation and said a Senate tech task force she chairs would be looking at how to “foster free markets and competition.”