Tuesday, July 23, 2019
The U.S. Department of Justice is opening an antitrust review into whether major tech companies have unlawfully “reduced competition” and “stifled innovation,” putting tech heavyweights like Facebook, Google, and Amazon under increased regulatory pressure.
The investigation, announced on Tuesday, will take an overarching look at whether firms have not only blocked competition but also harmed its customers. According to the Justice Department’s press release, the review will “consider the widespread concerns that consumers, businesses and entrepreneurs have expressed about search, social media, and some retail services online.”
No specific companies were mentioned in the DoJ’s announcement. However, it does come as Washington has ramped up its scrutiny of tech companies in the last year. Facebook is facing a $5 billion settlement with the Federal Trade Commission over its data privacy practices, and the DoJ is already considering individual anti-competition probes into Apple and Google. Democratic presidential candidate Sen. Elizabeth Warren has also proposed legislation earlier this year that would downsize major tech firms like Facebook and Amazon.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Assistant Attorney General Makan Delrahim of the Antitrust Division said in a statement. “The Department’s antitrust review will explore these important issues.”
The DoJ’s new review, according to The Wall Street Journal, is expected to go “above and beyond” the regulatory scrutiny that these companies already face from the FTC and Justice Department.
Shares of Facebook, Amazon, Apple and Alphabet, Google’s parent company, all dropped slightly in after-hours trading on Tuesday.
Despite the added pressure from Washington, antitrust experts recently told TheWrap that the breakup of major tech firms is anything but a sure thing. Penn State antitrust professor John Lopatka said there are “two necessary ingredients” that would be needed to take action against a company like Facebook: Not only does there have to be proof Facebook is a monopoly, but you’d also have to show Facebook extended its monopoly “through anti-competitive conduct.”
He continued: “We can assume Facebook has monopoly power in the social media platform market, but that’s not enough. You still have to prove it acquired or maintains that power through anti-competitive power, and I don’t know any reason to believe that’s the case.”
Source: the wrap feed