The U.S. Department of Justice opened a sweeping antitrust investigation of big technology companies and whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.
WASHINGTON – The Department of Justice on Tuesday announced that it is opening a wide-ranging antitrust review of “market-leading online platforms,” an unprecedented probe of the tech industry that could heighten calls for Amazon, Facebook and Google to be broken up.
The DOJ’s new effort aims to explore “widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online,” according to the agency. The DOJ did not explicitly mention any major tech giant by name, but its stated interests track closely with Google’s dominance in search, Facebook’s leadership in social media and Amazon’s position as the country’s e-commerce leader. All three companies control vast amounts of data that give them an edge over smaller rivals, critics say. (Jeff Bezos, founder and CEO of Amazon, owns The Washington Post.)
DOJ officials said they would “seek redress” if in the course of their investigation they find big tech companies committed violations of federal competition laws.
The DOJ’s review taps into growing, bipartisan fears that tech giants have grown too large and powerful, threatening rivals, harming consumers and undermining new innovations. It could sweep up the whole of Silicon Valley into the government’s regulatory crosshairs, a broad inquiry that mirrors the DOJ’s probes from generations ago into entire industries, such as oil and gas giants.
“It looks like the antitrust winter is over,” said Columbia University law professor Tim Wu, who chronicled the subject in his book “The Curse of Bigness: Antitrust in the New Gilded Age.”
Amazon and Facebook declined to comment. Google declined to comment on the DOJ probe, but it pointed to previous testimony to Congress that said the company doesn’t threaten competitors.
The nascent probe appears to differ from a formal, targeted government investigation into how Apple, Amazon, Google and Facebook may have acted anti-competitively.
The new effort is led by Makan Delrahim, the DOJ’s assistant attorney general for antitrust, who raised concerns in a statement Tuesday that “digital platforms may act in ways that are not responsive to consumer demands.”
In recent months, Delrahim appeared to offer a roadmap for the government’s coming review. Speaking at a conference in Israel, he warned that Washington would take a broad view of what constitutes a threat to competition. He pointed to the U.S. government’s case against Microsoft in the 1990s to show that federal regulators “already have in our possession the tools we need to enforce the antitrust laws in cases involving digital technologies.”
To start, DOJ officials are planning a meeting this week with attorneys general from states such as Colorado, Nebraska, and Iowa to examine the potential for bringing state-level cases against tech giants, according to two people familiar with the meetings who were not authorized to speak on the record. Some of those states have urged the U.S. government to open competition probes of tech giants, and many attended a private gathering hosted by the DOJ last September to discuss the power of online platforms, including concerns around competition, privacy and free speech.
The DOJ declined to provide further details about its plans.
The probe comes at the beckoning of Democrats and Republicans alike. President Donald Trump has repeatedly swiped at Silicon Valley in recent months, at one point last month threatening unspecified lawsuits against Facebook and Google. Earlier in July, Trump convened a special summit at the White House during which he attacked the industry for allegedly censoring conservatives – and pledged in the process to explore “all regulatory and legislative solutions to protect free speech.”
But many top Democrats seeking the White House in 2020 have signaled their interest in probing tech companies. Sen. Elizabeth Warren, D-Mass., has been the most aggressive, calling for many tech giants to be broken up. And Democrats and Republicans have joined together on Capitol Hill to launch a full investigation into Apple, Amazon, Facebook and Google on competition grounds, holding a hearing with all four companies earlier this month.
“Antitrust enforcers must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power,” Sen. Richard Blumenthal, D-Conn., said in a statement. “I have called for this kind of inquiry repeatedly and hope that Department of Justice enforcers will match their rhetoric with real action.”
Gene Kimmelman, a former DOJ antitrust official now working as a senior adviser to the consumer advocacy group Public Knowledge, said that Silicon Valley is ripe for a closer examination of the power of its dominant companies.
“This is a welcome step to shine a light on whether there’s antitrust problems and whether there needs to be updated laws to promote competition,” Kimmelman said.
But the president’s attacks prompted concerns among some experts about the rationale for the DOJ’s new review of Silicon Valley.
Thinking ahead to the 2020 election, “if the Democrats are going to stake out an aggressive antitrust platform, this is a way for Republicans to neutralize it politically, without actually doing anything,” said Robert Litan, a partner in the law firm Korein Tillery and former deputy assistant attorney general in the Department of Justice’s Antitrust division who helped prosecute Microsoft. “Another way to read this is that the administration doesn’t like any of these tech firms because they think they all lean Democratic and stifle conservative voices, and this is just pure, raw-knuckles payback.”
Prior to Tuesday’s announcement, federal regulators had divvied up scrutiny of Silicon Valley in a move that also presaged more formal antitrust probes. The Department of Justice assumed responsibilities of Apple and Google, while the Federal Trade Commission took on Amazon and Facebook. Experts said they did not believe the DOJ’s broad look at the tech industry affected the two agencies’ work, which is still in its preliminary stages.