Justice Department wants to take a closer look at tech giants
This will be a broad antitrust probe targeting all of big techBy Adrian Potoroaca
The big picture: The U.S. FTC and the European Commission aren't the only ones concerned about the ways big tech is throwing its weight around when it comes to how they compete with others in the market, and how they treat their users. While investigations into individual companies have resulted in punitive measures taken against them, now the U.S. Department of Justice also wants in on the action. Some tech giants have previously called upon government authorities to regulate the tech industry in the recent past, and so far it looks like they're listening.
The U.S. Justice Department has recently opened a broad antitrust probe that will look into how big tech companies have achieved their enormous wealth and how they might be using their dominant position in certain markets to gain advantages in others. While it didn't throw around any names, the announcement likely has companies like Facebook, Google, and Amazon worried. After all, it comes just after last week's hearings where they were bombarded with questions about their size, power and influence.
The antitrust review will see the DOJ taking a closer look at the practices of big search, social and retail platforms, with the aim of finding individual violations. In a public statement, Assistant Attorney General Makan Delrahim noted that "without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands." This means even Apple is in the crosshairs, which is not surprising if you consider that it has been publicly accused by Spotify and even sued by App Store developers for its anticompetitive behavior.
To put things in perspective, American tech giants are now under even more regulatory pressure, meaning they'll have to find better answers whenever they stand accused of wrongdoing. Attorney General Barr is known for being particularly interested in how Silicon Valley giants managed to grow to such a degree that they're too big to fail. And it isn't just about antitrust, as the DOJ will also tackle other issues such as data breaches.
If we look at Facebook - which isn't likely to be affected by a $5 billion fine from the FTC, or Amazon - who can still dodge having to pay up to $23 billion in Europe for anticompetitive practices, they both argue in front of regulators that they aren't that big and powerful. They also point out their role in job creation and in driving the economy, as well as the popular "But China..." argument.
Facebook does indeed give a voice to everyone that has a message and - like Amazon - a way for small businesses to find customers. Google and Apple both built an app economy on top of their successful mobile platforms. What regulators and we as consumers want to know, is if those companies used their success to cheat their way into even more success, something Apple isn't ready to admit to just yet.
In any case, the DOJ is "seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others." The antitrust review has a broader scope for now, but officials said it could definitely span more focused investigations in the future.