Technology giants’ power to be probed in US
The US Justice Department has announced an investigation into leading online platforms, examining whether they are unfairly restricting competition.
The DoJ did not name any firms, but companies such as Facebook, Google, Amazon and Apple are likely to be scrutinised in the wide-ranging probe.
It was sparked by “widespread concerns” about “search, social media, and some retail services online,” the DoJ said.
It marks the latest scrutiny of tech firms’ power over the US economy.
The US Federal Trade Commission is already looking into similar concerns, while there are also investigations taking place in the European Union.
Last month, the Justice Department was reported to be preparing an investigation of Google to determine whether the search engine giant had broken anti-trust law.
The US Department of Justice said its anti-trust review would consider “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers”.
It is likely to examine issues including how the largest tech firms have grown in size and power, and expanded into additional businesses, as well as how they have used the powers that come with having very large networks of users.
“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, who heads the Antitrust Division, said in a statement.
“The department’s antitrust review will explore these important issues.”
The Department of Justice hasn’t said specifically which companies are under investigation, but it can be safely assumed Apple, Amazon, Facebook and Google will be the focus of their attention.
The broad question is whether newcomers are truly able to compete against the scale and riches of the Silicon Valley giants. What will make these firms nervous is that the DoJ isn’t looking at any specific allegation, but instead embarking on a look at how the companies came to power, and what they’ve done to remain there.
This latest investigation is in addition to an ongoing probe by the US Federal Trade Commission into similar concerns, as well as investigations taking place in the European Union.
The tech companies insist they have viable competition, and warn that breaking up big American firms might pave the way for foreign competitors, particularly out of China.
Google and Facebook now dominate online advertising as consumers use their smartphones to order food, watch films and socialise online.
Meanwhile the growing popularity of online shopping has boosted the fortunes of firms such as Amazon.
Daniel Ives, an analyst at research firm Wedbush Securities, said the DoJ investigation was a “major shot across the bows” of big tech companies.
However, he said the end result was likely to result in “business model tweaks” or in a worst-case scenario potential fines rather than forced break-ups of the underlying businesses.
Technology companies are facing a growing global backlash, driven by concerns that they have too much power and are harming users and business rivals.
Google and Apple declined to comment, while Facebook and Amazon did not immediately comment.
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