Justice Department Opens Antitrust Review of Big Tech Companies

Justice Department Opens Antitrust Review of Big Tech Companies

The federal government has turned its full investigative powers on examining the world’s biggest technology companies, building on a backlash against the industry that has been growing for over a year.

The Justice Department said on Tuesday that it would start an antitrust review into how powerful internet companies had accumulated market power and whether they had acted to reduce competition. The announcement follows similar inquiries underway in Congress and at the Federal Trade Commission, which shares antitrust oversight responsibilities with the Justice Department.

The Justice Department did not name specific companies in a news release announcing its review, but noted that it would look into concerns about search, social media and some retail services — presumably putting Google, Facebook and Amazon on notice.

The pressure on tech giants has ended decades of deferential treatment toward the industry. In Congress, the House Judiciary subcommittee on antitrust is holding hearings and conducting its own investigation of the market power and behavior of the big tech companies.

At a hearing last week, with witnesses from Google, Facebook, Amazon and Apple, Representative David Cicilline, chairman of the subcommittee, said that the government stance for too long was to celebrate the new tech economy rather than scrutinize its corporate leaders.

“Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight. “ Mr. Cicilline, Democrat of Rhode Island, said in his opening statement. “As a result, the internet has become increasingly concentrated, less open, and growingly hostile to innovation and entrepreneurship.”

On Tuesday, Mr. Cicilline sent letters to three of the companies at last week’s hearing — Google, Facebook and Apple. He is seeking answers to questions posed at the hearing, but not directly addressed by the witnesses. Mr. Cicilline characterized those earlier replies as “evasive, incomplete or misleading.

In announcing the review, the Justice Department said it would look into whether the internet companies were “harming consumers.” For most of the last four decades, U.S. courts and regulators have interpreted the consumer harm standard of antitrust to mean that company behavior led to higher prices, but it’s challenging to make that argument when services like Google and Facebook are free and Amazon is celebrated for low prices and convenient delivery.

This latest review comes on the heels of the Justice Department and the Federal Trade Commission splitting up potential antitrust investigations into Facebook, Google, Amazon and Apple. It’s not clear how this review will differ from the investigations into the individual companies.

Google and Facebook declined to comment. Amazon did not immediately respond to a request for comment.

Apple referred to comments made by Tim Cook, the company’s chief executive, in a recent television interview on CBS News.

“I think we should be scrutinized,” Mr. Cook said. “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.”

While the major American technology companies have largely avoided antitrust scrutiny at home, they have been investigated more aggressively around the world, especially in Europe.

In March, European authorities fined Google 1.5 billion euros — about $1.7 billion — for antitrust violations in the online advertising market. The regulators said Google had violated antitrust rules by imposing unfair terms on companies that used its search bar on their websites in Europe. The fine was the third against Google by the European Union since 2017.

The United States, by contrast, has been seen as a lesser force in antitrust enforcement recently, with the Justice Department and Federal Trade Commission moving more cautiously.

“If the United States does not step up, competition policy will be set elsewhere,” said William Kovacic, a law professor at George Washington University and a former chairman of the Federal Trade Commission.

This is a developing story and will be updated.

Source link