The Department of Justice is opening a sweeping antitrust review into online platforms, potentially threatening some of Silicon Valley’s most powerful companies.
The probe will examine how the platforms have gained market power and whether they are engaging in practices that stifle competition or hurt consumers in violation of federal law. The antitrust review, the Justice Department said, “will consider the widespread concerns that consumers, businesses and entrepreneurs have expressed about search, social media, and some retail services online.”
The agency intends to seek information from the public and key industry stakeholders and will “seek redress” if it finds any “market-leading online platforms” have violated antitrust laws.
“Without the discipline of market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Assistant Attorney General Makan Delrahim, who leads the Justice Department’s Antitrust Division, said in a statement.
The Justice Department said the aim of its probe is to “assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets.”
While the companies targeted by the probe are not named, tech giants including Amazon, Google, and Facebook may be among those reviewed. Democratic presidential contender Elizabeth Warren, a Massachusetts senator, has said both Facebook and Amazon should be split up, in part because they compete against their own customers.
Republicans, too, have raised concerns that major online companies have gained too much power, and Europe has grown increasingly strict in regulating them.
In 2018, the European Commission fined Google $5.1 billion for anticompetitive practices, an amount that appears large until compared with the $103 billion in available funds the Mountain View, California-based company had at the time. It also ordered the company to halt problematic behavior that included forcing phonemakers who used the company’s open-source Android operating system to install the Google Search and Google Chrome apps on devices in order to connect to the Google Play app store.
Amazon, founded by billionaire Jezz Bezos, now faces similar risks. Europe has started investigating Amazon’s practice of selling some of the same merchandise as the retailers who use its e-commerce platform and might take steps from fining the company to forcing changes in its operations.
“There is something going on in terms of monopoly,” President Trump told CNBC in an interview just weeks earlier, citing the number of European regulatory actions against large American tech companies including Amazon and Apple. “We should be doing what they’re doing.”
Amazon, for its part, has rejected claims that it exploits customers or competes unfairly. An Amazon executive underscored that position earlier this month, when he joined representatives of Facebook, Apple, and Google to field questions from the House antitrust committee about their compliance with U.S. competition laws.
Democrats, who say Amazon and others have benefited from lax regulation intended to fuel the growth of the internet and related businesses in the mid-1990s, were unconvinced.
“There’s a growing consensus among venture capitalists and startups that there’s a kill zone around Google, Amazon, Facebook and Apple that prevents new startups from entering the market,” said Rep. David Cicilline, the Rhode Island Democrat who is chairman of the subcommittee. “The combination of high network effects, high switching costs and the self-reinforcing advantage of data can result in a ‘winner take all’ market that shields the dominant firms.”
