Government Expected to Take a Closer Look at Tech Giants

U.S. tech giants are expected to become targets of in-depth antitrust investigations to determine if any companies have become too large and may be stifling competition. According to sources, federal agencies have agreed to distribute the investigative responsibilities. The Justice Department reportedly has authority over looking into Apple and Google, while the Federal Trade Commission will have oversight of Amazon and Facebook. In addition, the House Judiciary Committee plans to examine competition in digital markets and the growing power of the tech industry.

Sources indicate that, “Google and Facebook appear to be closest to being in the agencies’ investigative crosshairs,” according to The Wall Street Journal. “In addition to any competitive problems in digital markets, the [Congressional] probe will look at whether current antitrust laws and enforcement efforts have kept pace with technological change.”

The Federal Trade Commission conducted a broad investigation of Google, but closed it down in 2013 without taking action. At that point, Google had made some voluntary changes.

“The big technology companies have ramped up dramatically in Washington with lawyers and lobbyists to handle a moment that has been brewing for some time,” notes WSJ. “The Internet industry — Google, Facebook and Amazon in particular — poured money into lobbying in the capital at a record pace in 2018.”

Global regulators have been scrutinizing the U.S. tech industry. The Wall Street Journal reports, “the shift has come with multibillion-dollar antitrust fines for Google from the European Union.” Google parent company Alphabet “typically is ranked among the world’s five largest firms by market capitalization,” and, with Facebook, is a “major player” in online advertising.

Among those U.S. politicians who have “begun to question the size and dominance of some of the tech giants” are Democratic presidential candidate Elizabeth Warren and former Trump strategist Steve Bannon, as well as senators Amy Klobuchar (D-Minnesota) and Marsha Blackburn (R-Tennessee), who asked the FTC to “take action.” Senator Ted Cruz (R-Texas) “linked the companies’ size and influence to alleged stifling of conservative speech online.”

Despite concerns, however, “Google’s products remain highly popular with consumers, and the company has spent years developing a support network in Washington and around the country.” The company has also funded “dozens of nonprofit groups active on antitrust issues across the political spectrum, including the American Antitrust Institute as well as several conservative think tanks.”

FTC’s earlier investigation painted “a complex portrait of a company working toward an overall goal of maintaining its market share by providing the best user experience, while simultaneously engaging in tactics that resulted in harm to many vertical competitors, and likely helped to entrench Google’s monopoly power over search and search advertising.” Most recently, U.S. Attorney General William Barr stated that, “you can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”

The Washington Post reports that, although the Justice Department’s and FTC’s plans for, respectively, Google and Amazon aren’t clear, this “kind of arrangement … typically presages more serious antitrust scrutiny, the likes of which many Democrats and Republicans on Capitol Hill have sought out of fear that tech companies have become too big and powerful.”

“If there is an active discussion of where the boundaries are, that would indicate there’s a reason for that discussion, whether it’s a new interest, study or investigation,” said Baker Botts partner Maureen Ohlhausen, a previous FTC chair. At consumer advocacy group Public Knowledge, president Gene Kimmelman added, “this should be a wake-up call to both Google and Amazon to behave themselves because it at least shows that the Justice Department and FTC are thinking about them.”

Related:
Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In, The New York Times, 6/3/19
The Big Challenge for Policy Makers: Policing American Tech Giants, The Wall Street Journal, 6/3/19