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Big Tech faces broad US Justice Department antitrust probe

File photo. Photograph:( Reuters )

Reuters Washington Jul 24, 2019, 06.46 AM (IST)

The US Justice Department said on Tuesday it was opening a broad investigation of major digital technology firms into whether they engage in anti-competitive practices, the strongest sign the Trump administration is stepping up its scrutiny of Big Tech.

The review will look into "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," the Justice Department said in a statement.

The Justice Department did not identify specific companies but said the review would consider concerns raised about "search, social media, and some retail services online" -- an apparent reference to Alphabet Inc, Amazon.com Inc and Facebook Inc, and potentially Apple Inc.

A Justice Department spokesman declined to provide a list of companies that would be scrutinized.

Google and Apple declined to comment, referring to prior statements by executives, while Facebook and Amazon did not immediately comment.

Facebook fell 1.7% in after-hours trading, while Alphabet fell 1%, Amazon was down 1.2% and Apple was 0.4% lower.

The announcement comes a day before the Federal Trade Commission is set to announce a $5 billion penalty to Facebook for failing to properly protect user privacy.

Senator Richard Blumenthal, a Democrat, said the Justice Department "must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power. Too long absent and apathetic, enforcers now must prevent privacy abuse, anti-competitive tactics, innovation roadblocks, and other hallmarks of excessive market power."

In June, Reuters reported the Trump administration was gearing up to investigate whether Amazon, Apple, Facebook and Alphabet's Google misuse their massive market power, setting up what could be an unprecedented, wide-ranging probe of some of the world’s largest companies.

A person briefed on the matter said the Justice review may also include some state attorneys general.

The Justice Department said the review "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 in which companies compete on the merits to provide services that users want."

Reuters reported on May 31 that the Justice Department was preparing an investigation of Google to determine whether the tech giant broke antitrust law.

Democrats and Republicans on Capitol Hill alike are expressing growing concerns about the size of the largest tech firms and their market power. Democratic presidential candidate Elizabeth Warren has called for breaking up companies like Amazon, Apple, Google and Facebook and unwinding prior acquisitions.

Last week, the House Judiciary Committee’s antitrust panel pressed executives from the four firms about their competitive practices and noted that Google, Facebook, Amazon had a rising share of key markets.

Story highlights

The Justice Department did not identify specific companies but said the review would consider concerns raised about "search, social media, and some retail services online" -- an apparent reference to Alphabet Inc, Amazon.com Inc and Facebook Inc, and potentially Apple In