DOJ Announces Antitrust Review of Tech Giants
By Todd Spangler
LOS ANGELES (Variety.com) – In a move that could potentially disrupt Silicon Valley’s biggest companies, the U.S. Justice Department announced that its antitrust division opened a review into “whether and how market-leading online platforms have achieved market power.”
The DOJ, in its announcement Tuesday, didn’t identify which companies it is looking into as part of the investigation. Facebook, Amazon, Google and Apple are the biggest and most powerful companies in the sector.
It’s the latest political shot across the bow against the tech industry, which has gained critics across the ideological spectrum.
“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 DOJ’s Antitrust Division said in a statement. “The Department’s antitrust review will explore these important issues.”
Delrahim led the DOJ’s unsuccessful lawsuit to block the AT&T-Time Warner merger.
In the past few months, media outlets reported that the DOJ and Federal Trade Commission were considering launching antitrust probes into large tech companies.
The DOJ on Tuesday said its inquiry was prompted by “widespread concerns” among consumers and businesses about “search, social media, and some retail services online.” According to the , the probe will include an examination into whether the companies are “engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”
The DOJ’s antitrust division is seeking information from the public, including industry participants “who have direct insight into competition in online platforms.” The agency said that if its investigation determines that companies have broken the law are identified, it “will proceed appropriately to seek redress.”
Shares of Alphabet (’s parent company), , and fell in after-hours trading after the Wall Street Journal reported the DOJ’s investigation prior to the official announcement.
The chance the DOJ’s investigation will lead to the breakup of any of the companies is unlikely , but the probe does introduce some near-term uncertainty for the sector, according to Wedbush Securities analyst Dan Ives.
“We ultimately believe this is more noise vs. the start of broader structural changes across the tech food chain and will likely result in business model tweaks and potential DOJ/FTC fines in a worst-case scenario rather than forced breakups of the underlying businesses,” Ives wrote in a note to investors.
Earlier this month, the FTC reportedly voted to fine Facebook around $5 billion for privacy-rules violation. The agency had been probing whether the social-media giant broke the conditions of its 2012 agreement with the FTC after Facebook user data was obtained by now-defunct consulting firm Cambridge Analytica.
The Beltway backlash against tech giants has included calls by Democratic presidential candidates Elizabeth Warren and Bernie Sanders to dismantle huge tech companies, while Republicans including Donald Trump have focused on a perceived political bias in how platforms like Facebook and Google moderate and rank content.
