U.S. moving toward major antitrust probe of tech giants

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U.S. moving toward major antitrust probe of tech giants
Reuters

URL: https://www.reuters.com/article/us-usa- ... SKCN1T42JH
Category: Politics
Published: June 3, 2019

Description: WASHINGTON (Reuters) - The U.S. government is gearing up to investigate the massive market power of Amazon, Apple, Facebook and Google, sources told Reuters on Monday, setting up what could be an unprecedented wide-ranging probe of some of the world’s largest companies. The Federal Trade Commission and the Department of Justice, which jointly enforce antitrust laws in the United States, have divided oversight over the four companies, two sources said, with Amazon and Facebook under the watch of the FTC, and Apple and Google under the Justice Department. Technology companies are facing a backlash in the United States and across the world, fueled by some people’s belief that the firms have too much power and are exerting a harmful effect on users or competitive marketplaces. The Justice Department and FTC generally do not acknowledge preparations for any investigations. U.S. President Donald Trump has called for closer scrutiny of social media companies and Google, accusing them of suppressing conservative voices online, without presenting any evidence. He has also repeatedly criticized Amazon for taking advantage of the U.S. Postal Service, also without evidence. Shares of Facebook Inc and Google’s owner Alphabet Inc both fell more than 6% on Monday. Amazon.com Inc shares fell 4.5% and Apple Inc shares were down 1%. U.S. media reported on Friday that the Justice Department was laying the groundwork to investigate Google to determine whether the world’s biggest online advertising platform was using its size to squeeze out smaller competitors, violating laws designed to ensure fair competition. The company declined comment on Friday. The Washington Post reported on Saturday that Amazon would come under the remit of the FTC in any probe. Amazon declined comment on Monday. Apple and Facebook did not immediately reply to a request for comment on Monday.
REGULATORY SCRUTINY
The four technology companies, all with market values in the hundreds of billions of dollars, have drawn scrutiny from regulators and lawmakers around the world over aspects of their business practices, although it was not clear what the U.S. Justice Department or FTC were planning to look at, if anything. Amazon, the world’s biggest online retailer, has been criticized for holding sway over third-party sellers on its website, who must pay for advertising to compete against first-party and private label sales by Amazon itself. Lawmakers have also argued that Amazon’s low prices have hurt brick-and-mortar retailers, many of whom have been unable to compete and have closed. The European Union is investigating a complaint by streaming music provider Spotify Technology SA that Apple abuses its power over app downloads. In 2014, the iPhone maker settled a Justice Department lawsuit alleging it conspired with publishers to raise the price of e-books. The FTC has already been investigating Facebook’s sharing of data belonging to 87 million of its users with the now-defunct British political consulting firm Cambridge Analytica. Facebook said in April that it expected to be fined up to $5 billion by the regulator. Facebook, which owns one-time rivals Instagram and WhatsApp and has more than 1.5 billion daily users, has a huge influence in many countries and has been criticized for allowing misleading posts and so-called ‘fake news’ on its service. The company last month rejected a call from one of its co-founders to split it into three, as lawmakers ramped up pressure on the Justice Department to launch an antitrust investigation. Google has faced accusations that its web search service, which dominates the market and has become a verb, leads consumers to its own products at the cost of competitors. The FTC settled an investigation of Google in 2013, concluding that the company had not manipulated its search results to hurt rivals. But the company has been fined multiple times by the European Union’s competition regulator, most recently in March for 1.5 billion euro ($1.7 billion) in a case focused on illegal practices in search advertising brokering from 2006 to 2016. Legal experts have said U.S. regulators are unlikely to attempt to break up the technology giants. It is rare to break up a company but not unheard of, with Standard Oil and AT&T being two of the biggest examples. U.S. antitrust probes more often result in an agreement to change certain business practices.

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House panel to probe competition in digital markets
Reuters

URL: https://www.reuters.com/article/us-usa- ... SKCN1T42QU
Category: Politics
Published: June 3, 2019

Description: WASHINGTON (Reuters) - The U.S. House of Representatives Judiciary Committee said on Monday it had started a bipartisan investigation into competition in digital markets. “A small number of dominant, unregulated platforms have extraordinary power over commerce, communication, and information online,” the panel said in a statement that did not name any companies. Separately, the Federal Trade Commission and the Justice Department are gearing up to investigate the market power of Amazon, Apple, Facebook and Alphabet’s Google, sources told Reuters on Monday.

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Big Tech faces broad U.S. Justice Department antitrust probe
Reuters

URL: https://www.reuters.com/article/us-usa- ... SKCN1UI2QM
Category: Politics
Published: July 24, 2019

Description: WASHINGTON (Reuters) - The U.S. Justice Department said on Tuesday it was opening a broad investigation of major digital technology firms into whether they engage in anticompetitive 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, anticompetitive 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. Congress held a series of hearings last year looking at the dominance of major tech companies and their role in displacing or swallowing up existing businesses. It is rare for the government to seek to undo a consummated deal. The most famous case in recent memory is the government’s effort to break up Microsoft Corp. The Justice Department won a preliminary victory in 2000 but was reversed on appeal. The case settled with Microsoft intact. “There is growing consensus among venture capitalists and startups that there is a kill zone around Google, Amazon, Facebook and Apple that prevents new startups from entering the market with innovative products and services to challenge these incumbents,” said Representative David Cicilline, a Democrat who heads the subcommittee. Apple CEO Tim Cook told CBS News last month that scrutiny was fair but “if you look at any kind of measure about is Apple a monopoly or not, I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly. Our share is much more modest. We don’t have a dominant position in any market.” Google’s Adam Cohen told the House Judiciary subcommittee last week that the company had “created new competition in many sectors, and new competitive pressures often lead to concerns from rivals.” Technology companies face a backlash in the United States and across the world, fueled by concerns among competitors, lawmakers and consumer groups that they have too much power and are harming users and business rivals. U.S. President Donald Trump has called for closer scrutiny of social media companies and Google, accusing them of suppressing conservative voices online, without presenting any evidence. Senator Marsha Blackburn, a Republican, praised the investigation and said a Senate tech task force she chairs would be looking at how to “foster free markets and competition.”

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House panel to discuss Big Tech's impact on privacy, antitrust
Reuters

URL: https://www.reuters.com/article/us-tech ... SKCN1VQ1ZC
Category: Politics
Published: September 5, 2019

Description: WASHINGTON (Reuters) - The House of Representatives’ antitrust panel will hold a hearing next week to discuss the effect of consumer data collection by big tech platforms, like Alphabet’s Google and Amazon, on online competition. The House Judiciary Committee’s antitrust subcommittee will hear from Rohit Chopra, who is on the Federal Trade Commission, as well as experts from Harvard Kennedy School and the American Enterprise Institute. The hearing is set for Sept. 12, and is one of three upcoming sessions focused on antitrust. The Senate Judiciary Committee’s antitrust panel will meet September 24 to discuss concerns that tech giants seek to buy smaller rivals in order to head off competition. The same senate panel meets on September 17 for an antitrust oversight hearing, with FTC Chairman Joe Simons and the Justice Department’s Makan Delrahim, head of the antitrust division, the only witnesses.

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U.S. states launch antitrust probe of big tech, Google ads in focus
Reuters

URL: https://www.reuters.com/article/us-tech ... SKCN1VU107
Category: Politics
Published: September 9, 2019

Description: WASHINGTON (Reuters) - Attorneys general from 48 U.S. states, the District of Columbia and Puerto Rico have opened an antitrust probe into big tech companies that focuses on Alphabet’s Google, Texas Attorney General Ken Paxton formally announced on Monday. Paxton leads the probe, he said, which will focus on Google’s advertising business. California and Alabama are not part of the investigation. States on Monday formally requested documents from Google on its advertising business, Paxton said. Several of the attorneys general at the announcement in Washington described the investigation as “preliminary” but said they expected it would expand to cover other issues including data privacy. Utah Attorney General Sean Reyes said the probe was “for the benefit of the tech ecosystem to help level the playing field.” Arkansas Attorney General Leslie Rutledge called Google’s online search engine a “juggernaut,” and argued that a free search sometimes came at the cost of the freedom to choose the best products from the best companies. The tech giants that were once praised as engines of economic growth with massive efficiencies have increasingly come under fire for allegedly misusing their clout in the market and lapses such as privacy breaches. U.S. President Donald Trump has called for closer scrutiny of social media firms and Google, accusing them of suppressing conservative voices online without presenting any evidence. Google specifically has faced accusations that its web search service, which has become so dominant that it is now a verb, leads consumers to its own products at the cost of competitors. There have also been complaints of potentially anti-competitive behavior in how it runs the advertising side of its business. Google said in a statement on Friday that it would work constructively with them. It had no further comment on Monday. Its shares were down 0.6 percent in late trading. Senator Josh Hawley, who as Missouri attorney general opened a Google probe in 2017, lauded the announcement on Monday as “a very big day for the folks who care about antitrust enforcement.” “I hope that Congress will get serious about acting. And I hope the United States Senate will lead the way there,” he said. Separately, a second group of state attorneys general, led by New York, is focusing on Facebook Inc, it was announced on Friday. The social media platform, which owns one-time rivals Instagram and WhatsApp and has more than 1.5 billion daily users, has been criticized for allowing misleading posts and so-called “fake news” on its service. Will Castleberry, Facebook’s vice president for state and local policy, said last week that the company would cooperate with state attorneys general. One criticism of Facebook is that it has been slow to clamp down on hate speech, and it recently paid a $5 billion settlement for sharing 87 million users’ data with the now-defunct British political consulting firm Cambridge Analytica. The consultancy’s clients included Trump’s 2016 election campaign. On the federal level, the Justice Department and Federal Trade Commission are probing Facebook, Google, Apple and Amazon, also for potential violations of antitrust law. Google’s parent Alphabet said on Friday the Department of Justice in late August requested information and documents related to prior antitrust probes of the company. The company added in a securities filing that it expects similar investigative demands from state attorneys general, and that it is cooperating with regulators. Amazon, the world’s biggest online retailer, has been accused of unfair tactics with third-party sellers on its website, who must pay for advertising to compete against first-party and private label sales by Amazon itself. Apple has come under fire from app developers over practices like making only iPhone apps available through its official App Store. The music-streaming app Spotify has alleged that App Store policies make it difficult to compete against Apple Music for paid subscribers. State attorneys general have fewer resources than the federal agencies but have been known to team up to take on even giant corporations. Most recently, 43 states and Puerto Rico sued Teva Pharmaceutical Industries Ltd and 19 other drugmakers in May, accusing them of scheming to inflate prices and reduce competition for more than 100 generic drugs.

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Apple, Facebook, Amazon, Google emails demanded in U.S. House panel probe
Reuters

URL: https://www.reuters.com/article/us-tech ... SKCN1VY1FX
Category: Politics
Published: September 13, 2019

Description: WASHINGTON (Reuters) - A U.S. House of Representatives panel on Friday demanded internal emails, detailed financial information and other company records from top executives of Amazon.com Inc., Facebook Inc, Apple Inc, and Alphabet Inc’s Google, widening the antitrust probe of Big Tech. The letters seek by Oct. 14 internal emails over the last decade from Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Facebook CEO Mark Zuckerberg and Alphabet CEO Larry Page, among others, about acquisitions. Apple shares fell about 1.8% after the market opened. While Apple had been mentioned as a potential target, the House letter offered the first concrete evidence of a wide-ranging antitrust investigation. Apple has faced criticism that its App Store’s policies and algorithms support its own products and stifle third-party applications. On Monday, the Texas attorney general led a group of 50 attorneys general from U.S. states and territories in a probe of whether Google abuses its market power in advertising. “There is growing evidence that a handful of corporations have come to capture an outsized share of online commerce and communications,” said House Judiciary Committee chairman Jerrold Nadler, a Democrat, who signed the letters along with Ranking Republican Representative Doug Collins and Representative David Cicilline, who chairs the antitrust subcommittee and ranking Republican Jim Sensenbrenner. “This information is key in helping determine whether anticompetitive behavior is occurring, whether our antitrust enforcement agencies should investigate specific issues and whether or not our antitrust laws need improvement to better promote competition in the digital markets,” Collins said in a statement. The lawmakers seek emails from senior executives on topics including acquisitions like Amazon’s purchase of AbeBooks, PillPack, Eero, Ring, Zappos and Whole Foods; and Google’s acquisition of AdMob, YouTube, Android and DoubleClick. They also seek information on various policies including Google’s decision to automatically sign into Chrome any user to logs into any Google service. Apple did not immediately respond to a request for comment, while Amazon and Facebook declined to comment. Google referred to a blog post this week that said its services “create choice for consumers.” The committee requested information from the companies’ executives on market share, competitors, their largest customers for specific products and documents from other investigations. It asked Apple for information on App Store concerns such as the decision to remove some parental control apps and its policy regarding whether iPhone users can set non-Apple apps as defaults. The committee seeks communications on Facebook’s purchase of Instagram, WhatsApp and Onavo and its decisions to integrate Instagram, Facebook Messenger and WhatsApp and to cut off apps from its social graph. The U.S. Justice Department said in July it is investigating “whether and how” large tech companies in “search, social media, and some retail services online” are engaging in anticompetitive behavior. Google said it received a formal request for documents from the Justice Department in late August.

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Trump administration officials tell Senate about Big Tech antitrust probes
Reuters

URL: https://www.reuters.com/article/us-tech ... SKBN1W225Q
Category: Politics
Published: September 17, 2019

Description: WASHINGTON (Reuters) - The Justice Department’s antitrust division chief, Makan Delrahim, said Tuesday that its probes of big technology companies like Alphabet’s Google were a “priority” that could result in either “law enforcement or policy options as solutions.” Delrahim and Joe Simons, chair of the Federal Trade Commission, began testimony to the Senate Judiciary Committee’s antitrust panel. The Trump administration is in the early stages of investigating Google, Facebook, Amazon and Apple for allegedly using their clout illegally to hobble competitors. Senator Mike Lee, a Republican and subcommittee chair, pressed the agencies in opening remarks about how they were collaborating. Reuters and others reported in June that the agencies had divided up the companies, with Justice taking Google and Apple while the FTC took Facebook and Amazon. The Justice Department later said it was opening a probe of online platforms. This led some industry observers to question whether the two probes would overlap. “Based on news reports, it sounds like your agencies may be pursuing monopolization investigations of the same companies,” Lee said in written remarks. “I don’t think your agencies should be divvying up parts of a monopolization investigation of the same tech company.” Delrahim said in his written testimony that the department had made the probe a “priority.” He said the agency had opened a probe of “market-leading online platforms” and noted that the department had had complaints about “search, social media, and some retail services online,” a description that could include Facebook and Amazon. Depending on where the evidence led, Delrahim said, “We could look to both law enforcement and policy options as solutions.” “We welcome further input from not only those market stakeholders, but also from members of Congress, particularly this subcommittee,” he said. The FTC’s Simons noted in his statement the agency’s probe of Facebook, which the company acknowledged in July. He said the agency’s Technology Task Force was “up and running and actively investigating competitive activity in U.S. technology markets.” Groups of state attorneys general also are probing Facebook and Google, but it is unclear how much coordination there is between the two agencies or between the agencies and the states. Senator Marsha Blackburn, a Republican who has been outspoken about online privacy, is expected to ask if a federal privacy law would act to curb alleged abuses by big technology companies. Senator Patrick Leahy, a Democrat, is expected to ask whether there are safeguards to prevent President Donald Trump’s White House from insisting that antitrust be used for political ends, according to a source close to Leahy’s office. Trump is a long-time critic of the cable news channel CNN, a unit of AT&T, and the Justice Department sued to stop AT&T from buying Time Warner, CNN’s parent, but lost. Delrahim has denied making decisions based on politics. In June, a group of senators asked the government if the president had interfered in a review of the proposed $26 billion merger of T-Mobile US Inc and Sprint Corp. Democratic Senators Amy Klobuchar and Cory Booker, who are running for president and sit on the subcommittee, signed the letter, as did Senator Elizabeth Warren, also a candidate for the Democratic nomination. The Justice Department approved the deal, but states sued to stop it. Klobuchar and Senator Richard Blumenthal may also ask about legislation introduced in August to allow harsher penalties for companies that violate antitrust law.

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Google, Facebook, Amazon and Apple offer defense in congressional antitrust probe
Reuters

URL: https://www.reuters.com/article/us-usa- ... SKBN1XT28X
Category: Politics
Published: November 19, 2019

Description: WASHINGTON/SAN FRANCISCO (Reuters) - Four top U.S. tech companies, Alphabet’s Google, Facebook, Amazon.com and Apple, responded to questions from a congressional committee by defending their practices and declining to answer some questions. The House of Representatives Judiciary Committee, which released the answers Tuesday, had sent the queries as part of its antitrust probe of the four giants, which face a long list of other antitrust probes. The companies, long a symbol of the dynamism of the U.S. economy, have seen their reputations tarnished by privacy lapses and allegations they abused their perch on top of the market to hurt small and nascent rivals. Facebook and Apple declined comment for this story while Amazon and Google had no immediate comment. In its responses, Google, which owns YouTube, denied favoring its own services over those of competitors in search, video and internet browsers. It said “the vast majority” of clicks following a Google search go to non-Google websites, that results from its YouTube offering are not given greater weight than rivals’, and that its word processing and analytics tools are designed to work well with all browsers, not just its Chrome. Google also said its “vertical integration” of advertising tools benefits advertisers in part through better consumer targeting, but that the ability of rivals to compete is not “meaningfully affected” because it takes steps to level the playing field. Despite its huge collection of data on search queries and clicks, Google said it could not provide much of the data sought by the committee. For example, asked whether it could share how many searches display location information about a business, Google said, “We do not have a standard definition for what searches are considered ‘location searches’ and thus, cannot provide the specific information requested.” For its part, Facebook acknowledged cutting off certain third-party apps from its developer platform for replicating core functionalities, such as Twitter’s now-shuttered Vine, which it said replicated a Facebook product. But it provided limited answers to other questions on the company’s handling of prospective competitors. For example, asked for the timing and “exact circumstances” that led it to remove apps Phhhoto, MessageMe, Voxer and Stackla, Facebook replied that it “will restrict apps that violate its policies,” without disclosing details. On a related note, Senators Josh Hawley, a Missouri Republican, and Chris Coons, a Delaware Democrat, wrote to Facebook Tuesday to ask how the social media giant acquires users’ locations, why locations are collected and if collection occurs when users have asked that it not be. Apple answered questions about its browser and commissions it pays in its App Store, and addressed other issues, most of which are generally known. It said exactly two employees had sought to take disputes to arbitration. But asked how much it had spent on its map app that competes with Google, it said only “billions.” Amazon.com said in its response that it uses aggregated data from merchants on its third-party marketplace for “business purposes,” but denied using the data to launch, source or price private-label products. As of Sept. 29, there were approximately 384,000 U.S. active individual seller accounts on Amazon and approximately 514,000 active professional seller accounts in the U.S, the company said. Amazon also acknowledged asking third-party merchants to lower their price on Amazon.com, when it finds merchants sell items for less on a competing website. Amazon declined, however, to say how many Amazon private label products are sold at cost or below cost, how much revenue and profit Amazon makes from selling private brands or how it prices such items. Amazon said it has 45 brands encompassing 158,000 private-label products, as well as some private brand items that are part of its Amazon Fresh grocery delivery service.

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Amazon faces U.S. antitrust scrutiny on cloud business: Bloomberg
Reuters

URL: https://www.reuters.com/article/us-amaz ... SKBN1Y9031
Category: Politics
Published: December 5, 2019

Description: (Reuters) - U.S. Federal Trade Commission (FTC) has broadened scrutiny of Amazon.com Inc beyond its retail operations to include cloud-computing business, Bloomberg reported on Wednesday, citing people familiar with the matter. The U.S. antitrust enforcers have been asking software companies about practices around Amazon’s cloud unit Amazon Web Services, the report said. Big tech companies such as Facebook Inc, Alphabet Inc’s Google, Apple Inc and Amazon face a slew of antitrust probes by the federal government, state attorneys general and congress. FTC’s Technology Enforcement Division was focusing its probes of multi-sided platforms on illegal conduct and mergers that previously won antitrust approval. FTC and Amazon declined to comment on the report. In cloud computing, one of the fastest-growing areas in the technology industry, businesses rent out servers from Amazon instead of running their own data centers. Amazon is the biggest cloud services provider, competing most closely with Microsoft Corp. Smaller companies also compete to provide services on cloud networks to developers and corporate customers. Analysts expect Amazon’s cloud unit to generate $34.9 billion in sales in 2019, according to IBES data from Refinitiv. In addition to the FTC probes, the Justice Department and House of Representatives Judiciary Committee are investigating all four big tech companies.

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U.S. state attorneys general likely to bring antitrust lawsuits against Google -source
Reuters

URL: https://www.reuters.com/article/us-goog ... SKBN22R37I
Category: Politics
Published: May 15, 2020

Description: (Reuters) - A group of state attorneys general led by Texas are likely to file an antitrust lawsuit against Alphabet Inc’s Google and are working on potential litigation for later this year, a person familiar with the situation said on Friday. The Justice Department is also moving toward bringing a case as soon as this summer, The Wall Street Journal reported on Friday. Shares of Alphabet fell about 1.5% in after-hours trading. Google - along with Facebook Inc, Amazon.com Inc and Apple Inc - are under a series of probes into allegations that the tech behemoths use their clout to unfairly defend their market share, including one by the House Judiciary Committee’s antitrust panel. The federal probe of Google focuses on search, advertising and management of its Android operating system. The Federal Trade Commission settled an antitrust investigation of Google in 2013 with a reprimand. Texas Attorney General Ken Paxton, who is leading the multi-state investigation, said they were talking to companies who said that they had been hurt by the search and advertising giant. “Our antitrust investigation into Google has not been slowed down by the coronavirus pandemic,” he said in a statement. “We hope to have the investigation wrapped up by fall. If we determine that filing is merited, we will go to court soon after that.” Paxton said in February he has not taken any possible punishment off the table, including breaking up the search and advertising giant. Google said it would not comment on speculation about the potential for litigation. “We continue to engage with the ongoing investigations led by the Department of Justice and Attorney General Paxton, and we don’t have any updates or comments on speculation,” a Google spokesperson said in an email statement. The Justice Department did not immediately reply to a request for comment. The four tech giants, which are powerhouses in search and online advertising, social media, online sales and smartphones, have caused concern among progressive Democrats and conservative Republicans alike because of their outsized clout. The Justice Department is believed to be looking at all four companies while the FTC is probing Facebook and Amazon.com. Dozens of state attorneys general, led by New York, are also investigating Facebook.

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U.S. Justice Department hits Google with biggest antitrust lawsuit in two decades
Reuters

URL: https://www.reuters.com/article/us-tech ... SKBN2751OC
Category: Politics
Published: October 20, 2020

Description: WASHINGTON (Reuters) - The U.S. Justice Department and 11 states filed an antitrust lawsuit against Alphabet Inc’s Google on Tuesday for allegedly breaking the law in using its market power to fend off rivals, and called for action. The lawsuit marks the biggest antitrust case in a generation, comparable to the lawsuit against Microsoft Corp filed in 1998 and the 1974 case against AT&T which led to the breakup of the Bell System. The lawsuit claims that Google acted unlawfully to maintain its position in search and search advertising on the internet. It states that “absent a court order, Google will continue executing its anticompetitive strategy, crippling the competitive process, reducing consumer choice, and stifling innovation. “Google is now the unchallenged gateway to the internet for billions of users worldwide ... For the sake of American consumers, advertisers, and all companies now reliant on the internet economy, the time has come to stop Google’s anticompetitive conduct and restore competition.” When asked on a conference call what specific action should be taken, a Justice Department official said, “Nothing is off the table.” Google, whose search engine is so ubiquitous that its name has become a verb, did not immediately respond to a request for comment. The company had revenue of $162 billion in 2019, more than the nation of Hungary. Republican Senator Josh Hawley, a vociferous Google critic, accused the company of keeping power through “illegal means” and called the lawsuit “the most important antitrust case in a generation.” The Microsoft lawsuit was credited with clearing the way for the explosive growth of the internet since the antitrust scrutiny prevented the company from attempting to thwart competitors. Tuesday’s federal lawsuit marks a rare moment of agreement between the Trump administration and progressive Democrats. U.S. Senator Elizabeth Warren tweeted on Sept. 10, using the hash tag #BreakUpBigTech, that she wanted “swift, aggressive action.” Coming just days before the U.S. presidential election, the filing’s timing could be seen as a political gesture since it fulfills a promise made by President Donald Trump to his supporters to hold certain companies to account for allegedly stifling conservative voices. Republicans often complain that social media companies including Google take action to reduce the spread of conservative viewpoints on their platforms. Lawmakers have sought, without explaining how, to use antitrust laws to compel Big Tech to stop these alleged limitations. Shares of Alphabet rose nearly 1% after news the government lawsuit was imminent. There was some doubt in the markets that Washington lawmakers will actually come together and take action, according to Neil Campling, head of tech media and telecom research at Mirabaud Securities in London. “It’s like locking the proverbial door after the horse has bolted. Google has already got the monopolistic position, has invested billions in infrastructure, AI, technologies, software, engineering and talent. You can’t simply unwind a decade of significant progress.” The 11 states which joined the lawsuit all have Republican attorneys general. More lawsuits could be in the offing since probes by state attorneys general into Google’s broader businesses are under way, as well as an investigation of its broader digital advertising businesses. A group of attorneys general led by Texas is expected to file a separate lawsuit focused on digital advertising as soon as November, while a group led by Colorado is contemplating a more expansive lawsuit against Google. The lawsuit comes more than a year after the Justice Department and Federal Trade Commission began antitrust investigations into four big tech companies: Amazon.com Inc , Apple Inc, Facebook Inc and Google. Seven years ago, the FTC settled an antitrust probe into Google over alleged bias in its search function to favor its products, among other issues. The settlement came over the objections of some FTC staff attorneys. Google has faced similar legal challenges overseas. The European Union fined Google $1.7 billion in 2019 for stopping websites from using Google’s rivals to find advertisers, $2.6 billion in 2017 for favoring its own shopping business in search, and $4.9 billion in 2018 for blocking rivals on its wireless Android operating system.

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Facebook faces U.S. lawsuits that could force sale of Instagram, WhatsApp
Reuters

URL: https://www.reuters.com/article/us-tech ... SKBN28J2UL
Category: Politics
Published: December 10, 2020

Description: WASHINGTON/PALO ALTO (Reuters) - Facebook Inc could be forced to sell its prized assets WhatsApp and Instagram after the U.S. Federal Trade Commission and nearly every U.S. state filed lawsuits against the social media company, saying it used a “buy or bury” strategy to snap up rivals and keep smaller competitors at bay. With the filing of the twin lawsuits on Wednesday, Facebook becomes the second big tech company to face a major legal challenge this year after the U.S. Justice Department sued Alphabet Inc’s Google in October, accusing the $1 trillion company of using its market power to fend off rivals. The lawsuits highlight the growing bipartisan consensus to hold Big Tech accountable for its business practices and mark a rare moment of agreement between the Trump administration and Democrats, some of whom have advocated breaking up both Google and Facebook. The complaints on Wednesday accuse Facebook of buying up rivals, focusing specifically on its previous acquisitions of photo-sharing app Instagram for $1 billion in 2012 and messaging app WhatsApp for $19 billion in 2014. Federal and state regulators said the acquisitions should be unwound - a move that is likely to set off a long legal challenge as the deals were cleared years earlier by the FTC. “For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James on behalf of the coalition of 46 states, Washington, D.C. and Guam. Alabama, Georgia, South Carolina and South Dakota did not participate in the lawsuit. James said the company acquired rivals before they could threaten the company’s dominance. Facebook’s general counsel Jennifer Newstead called the lawsuits “revisionist history” and said antitrust laws do not exist to punish “successful companies.” She said WhatsApp and Instagram have succeeded after Facebook invested billions of dollars in growing the apps. “The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” Newstead said. Newstead also raised doubts about alleged harms caused by Facebook, arguing that consumers benefited from its decision to make WhatsApp free, and rivals like YouTube, Twitter and WeChat did “just fine” without access to its developer platform. In a post on Facebook’s internal discussion platform, Chief Executive Mark Zuckerberg told employees he did not anticipate “any impact on individual teams or roles” as a result of the lawsuits, which he said were “one step in a process which could take years to play out in its entirety.” Comments were turned off for Zuckerberg’s post, as well as for other posts on the lawsuits shared by Newstead and Chief Privacy Officer for Product Michel Protti, according to copies viewed by Reuters. Newstead also warned employees not to post about the cases. Facebook did not immediately respond to questions about the posts.
PROTRACTED FIGHT
Zuckerberg told employees in July 2019 that Facebook would “go to the mat” to fight a legal challenge to break up the company, calling it an “existential” threat, according to audio of internal company meetings published by The Verge. Although breakup remedies are rare, some antitrust experts said the case was unusually strong given damning statements by Zuckerberg plucked from Facebook’s own documents, like a 2008 email in which he said “it is better to buy than compete.” Other experts such as Seth Bloom of Bloom Strategic Counsel said the FTC complaint was “significantly weaker” than the DOJ’s lawsuit against Google. “We’re talking about acquisitions that are six or eight years old and it will be difficult for a court to order divestitures of many years ago,” Bloom said. Investors echoed similar concerns. “I do not know if the FTC or DOJ will be successful in breaking Facebook up. I’m assuming this will be dragged out in the courts as FB defends itself,” said Daniel Morgan, a portfolio manager at Synovus Trust in Atlanta, Georgia. The lawsuits are the biggest antitrust cases in a generation, comparable to the lawsuit against Microsoft Corp in 1998. The federal government eventually settled that case, but the yearslong court fight and extended scrutiny prevented the company from thwarting competitors and is credited with clearing the way for the explosive growth of the internet. Last month, Facebook said it was buying customer service start-up Kustomer, in an acquisition that the Wall Street Journal said valued Kustomer at $1 billion. Facebook also bought Giphy, a popular website for making and sharing animated images, or GIFs, in May. That acquisition has already drawn scrutiny from the United Kingdom’s competition watchdog. Facebook shares fell as much as 3% after the news before paring losses to close down 1.9%.

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House Judiciary launches antitrust investigation into tech giants
The Hill

URL: https://thehill.com/policy/technology/4 ... ech-giants
Category: Politics
Published: June 3, 2019

Description: The House Judiciary Committee is launching a bipartisan investigation into whether large tech companies such as Facebook, Google and Amazon are using their vast market power to suppress competition. The panel's Democratic and Republican leaders announced the investigation, which will address the question of whether Congress should pass more stringent antitrust laws to rein in Silicon Valley, on Monday. The open internet has delivered enormous benefits to Americans, including a surge of economic opportunity, massive investment, and new pathways for education online," Judiciary Committee Chairman Jerrold Nadler (D-N.Y.) said in a statement. "But there is growing evidence that a handful of gatekeepers have come to capture control over key arteries of online commerce, content, and communications." "Given the growing tide of concentration and consolidation across our economy, it is vital that we investigate the current state of competition in digital markets and the health of the antitrust laws," he added. The investigation will be the first Congress has ever conducted into how Silicon Valley's dominant platforms wield their vast market power. The probe will include a series of hearings and will give lawmakers an opportunity to seek information from the companies about their practices through requests and subpoenas. The committee said the probe would focus on three areas: documenting where competition is lacking in digital markets, exploring whether large companies are suppressing competition, and determining whether Congress and regulators need to do more to address Big Tech's dominance. "As tech has expanded its market share, more and more questions have arisen about whether the market remains competitive," Rep. Doug Collins (R-Ga.), the top Republican on the committee, said in a statement. "Our bipartisan look at competition in the digital markets gives us the chance to answer these questions and, if necessary, to take action." The news comes as regulators are also reportedly setting themselves up for a broad investigation into Silicon Valley. In recent days, media outlets have reported that the Department of Justice (DOJ) and the Federal Trade Commission (FTC) agreed to divvy up the largest tech companies into their respective jurisdictions. The FTC would reportedly have the responsibility of investigating Facebook and Amazon, while the DOJ could pursue Google and Apple. It's unclear whether there are any investigations in the works, but the reports sent the companies' stocks tumbling Monday. If Congress decides that the rules need changing, tech companies could have even more to fear. "This is the first time there's been an investigation of this magnitude in decades, and frankly it's long overdue," Rep. David Cicilline (D-R.I.), who chairs the Judiciary antitrust subcommittee, told reporters on Monday.

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Justice Department charges Google with illegally maintaining search monopoly
The Hill

URL: https://thehill.com/policy/technology/5 ... ing-search
Category: Legal
Published: October 20, 2020

Description: The Department of Justice (DOJ) on Tuesday charged Google with illegally maintaining a monopoly on search and search advertising, teeing off a legal battle likely to take years and send shockwaves across Silicon Valley. The lawsuit, filed in District of Columbia federal court, is the result of a yearlong investigation into concentrations of economic power in the online economy. The DOJ argues that Google has entered into exclusionary contracts with phone makers to preload its search engine onto devices using Alphabet’s Android operating system. Those contracts have allowed Google to maintain a monopoly while stifling competition and innovation, the suit contends. It also accuses Google of using profits from that monopoly to buy preferential treatment for its search engine on web browsers, including Safari. Estimates of Google’s control of the market for online searches range from 80 up to 90 percent, resulting in tens of billions in annual revenue. The Federal Trade Commission investigated whether Google had abused its search market power nearly a decade ago, but the five-person commission voted not to bring a case in 2013. Eleven Republican state attorneys general joined the case filed Tuesday. Other attorneys general may choose to join the case later or bring their own challenges to Google’s position. The attorneys general of New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee and Utah said shortly after the case was filed that a bipartisan investigation into Google will continue. “We appreciate the strong bipartisan cooperation among the states and the good working relationship with the DOJ on these serious issues,” they said in a statement. “We plan to conclude parts of our investigation of Google in the coming weeks. If we decide to file a complaint, we would file a motion to consolidate our case with the DOJ’s. Deputy Attorney General Jeffrey Rosen led the case, although, according to multiple reports, Attorney General William Barr was very involved in the investigation and pushed for it to be released before the upcoming election. The DOJ calls for the court to decree that Google acted unlawfully to maintain its search monopolies in violation of Section 2 of the Sherman Act and enter “structural relief as needed.” “Nothing is off the table, but the question of remedies is best answered by the court after it's had a chance to hear all the evidence regarding our clients,” Ryan Shores, associate deputy attorney general, told reporters. Google called the lawsuit "deeply flawed" in its initial response to the case. “People use Google because they choose to -- not because they're forced to or because they can't find alternatives,” a spokesperson said in a statement. The lack of bipartisan sign-off and timing of the lawsuit close to the election have raised flags for many observers. Alex Harman, competition policy advocate at Public Citizen, called the suit “nothing more than a thinly veiled political stunt.” “The Trump DOJ’s narrow focus and alienation of the bipartisan state attorneys general is evidence of an unserious approach driven by politics and is likely to result in nothing more than a choreographed slap on the wrist for Google,” he said. “This will be a missed opportunity to bring about a structural reckoning with one of the most powerful and wealthy companies in the world so that Trump and Barr can score political points.” The lawsuit comes two weeks after Democratic lawmakers on the House Judiciary Committee released a lengthy report on competition in digital markets that accused Google of controlling a monopoly over online search and the ads that come up during search. “A significant number of entities — spanning major public corporations, small businesses and entrepreneurs — depend on Google for traffic, and no alternate search engine serves as a substitute,” the report said. Rep. David Cicilline (D-R.I.), the chair of the committee's antitrust panel, called the suit “long overdue.” “It is critical that the Justice Department’s lawsuit focuses on Google’s monopolization of search and search advertising, while also targeting the anticompetitive business practices Google is using to leverage this monopoly into other areas, such as maps, browsers, video, and voice assistants,” he added.

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Justice Department to Open Broad, New Antitrust Review of Big Tech Companies
The Wall Street Journal

URL: https://www.wsj.com/articles/justice-de ... 1563914235
Category: Politics
Published: July 23, 2019

Description: Inquiry signals Barr’s deep interest in tech sector, poses threat to companies such as Facebook, Google, Amazon, Apple
WASHINGTON—The Justice Department is opening a broad antitrust review into whether dominant technology firms are unlawfully stifling competition, adding a new Washington threat for companies such as Facebook Inc., Google, Amazon.com Inc. and Apple Inc. The review is geared toward examining the practices of online platforms that dominate internet search, social media and retail services, the department said, confirming the review shortly after The Wall Street Journal reported it. The new antitrust inquiry under Attorney General William Barr could ratchet up the already considerable regulatory pressures facing the top U.S. tech firms. The review is designed to go above and beyond recent plans for scrutinizing the tech sector that were crafted by the department and the Federal Trade Commission. The two agencies, which share antitrust enforcement authority, in recent months worked out which one of them would take the lead on exploring different issues involving the big four tech giants. Those turf agreements caused a stir in the tech industry and rattled investors. Now, the new Justice Department review could amplify the risk, because some of those companies could face antitrust claims from both the Justice Department and the FTC. The FTC in February created its own task force to monitor competition in the tech sector; that team’s work is ongoing. The Justice Department will examine issues including how the most dominant tech firms have grown in size and might—and expanded their reach into additional businesses. The Justice Department also is interested in how Big Tech has leveraged the powers that come with having very large networks of users, the department said. There is no defined end-goal yet for the Big Tech review other than to understand whether there are antitrust problems that need addressing, but a range of options are on the table, the officials said. The inquiry could eventually lead to more focused investigations of specific company conduct, they said. The review also presents risks for the companies beyond whether antitrust issues are identified. The department won’t ignore other company practices that may raise concerns about compliance with other laws, officials said. “Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Justice Department antitrust chief Makan Delrahim said in a statement. “The department’s antitrust review will explore these important issues.” Representatives for Facebook, Alphabet, Amazon and Apple didn’t respond to requests to comment. In after-hours trading Tuesday, shares for those four companies were down. Apple was down by about 0.4%, Amazon by about 1.13%, Alphabet by about 0.96%, and Facebook by about 1.65%. The Big Tech companies have said they are highly innovative firms that create jobs and provide products and services that consumers love. They have said they have rightly won their places atop the tech pyramid and have to compete fiercely to stay there. The Justice Department already has been preparing to probe whether Alphabet Inc. ’s Google is engaging in unlawful monopolization practices. The Journal earlier reported the department’s plans for that investigation, whose existence hasn’t been confirmed by the agency. The department’s antitrust division will conduct both reviews; it is unknown if and when the two efforts will intersect. On the broader tech review, the division will work in close coordination with Deputy Attorney General Jeffrey Rosen, the officials said. The department appears to be hitting the ground running. It recently hosted a private presentation where officials heard from critics of Facebook, including academics, who walked through their concerns about the social-media giant and advocated for its breakup, according to people familiar with that meeting. Tech and antitrust observers believed issues related to Facebook’s dominance were to be handled by the FTC. Both the FTC and the Justice Department have made clear that they view tech-sector competition issues as a priority. Under agreements brokered in recent months between Mr. Delrahim and FTC Chairman Joseph Simons, the Justice Department obtained clearance to proceed with a probe of whether Google has engaged in illegal monopolization tactics, as well as jurisdiction over Apple for similar issues. The FTC, meanwhile, won for itself the right to explore monopolization questions involving Facebook and Amazon. (The commission already has undertaken a lengthy consumer-protection investigation of Facebook’s privacy practices, and the company has agreed to a $5 billion fine.) Justice Department officials said those agreements weren’t meant to be open-ended or all-encompassing. But in any case the department isn’t trying to pre-empt the FTC’s work, they said, and suggested the two agencies might explore different tech practices by the same company, as well as different legal theories for possible cases. The two agencies have been in regular contact at both the leadership and staff levels to coordinate their efforts, according to a person familiar with the discussions. While the top tech firms were once the darlings of the public, attitudes have shifted as some consumers, and politicians on both the left and the right, have grown uncomfortable with how much power and influence they wield in the economy and society. Some Democratic presidential candidates have called for the breakup of companies like Google and Facebook, while lawmakers of both parties have sounded alarm bells, though at times for different reasons. Some Republicans have voiced concerns about whether tech companies disfavor conservative voices, claims that industry leaders have denied. President Trump has escalated his criticisms of Big Tech recently, openly suggesting the U.S. ought to sue Google and Facebook, comments that could hang over the Justice Department’s new efforts. Aside from Justice Department and FTC scrutiny, a House antitrust subcommittee also is taking a broad look at potential anticompetitive conduct in the tech sector. Executives from Facebook, Google, Apple and Amazon all testified before the panel last week. Seeds for the new Justice Department review were planted in January at Mr. Barr’s confirmation hearing, when he said that he believed antitrust issues in the tech sector were important. “I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers,” Mr. Barr told senators. “You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.” Justice Department officials said they would use the new antitrust review to seek extensive input and information from industry participants, and eventually from the dominant tech firms themselves. It isn’t yet known whether much of the information-gathering will be done on a voluntary basis or if companies eventually could be compelled by the government to turn over materials.

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Google emerges as target of a new state attorneys general antitrust probe
The Washington Post

URL: https://www.washingtonpost.com/technolo ... ust-probe/
Category: Politics
Published: September 3, 2019

Description: More than half of state attorneys general are preparing to announce an investigation into Google next week.
More than half of the nation’s state attorneys general are readying an investigation into Google for potential antitrust violations, scheduled to be announced next week, marking a major escalation in U.S. regulators’ efforts to probe Silicon Valley’s largest companies. A smaller group of these state officials, representing the broader coalition, is expected to unveil the investigation at a Monday news conference in Washington, according to three people familiar with the matter who spoke on the condition of anonymity because they were not authorized to discuss a law enforcement proceeding on the record, cautioning the plans could change. It is unclear whether some or all of the attorneys general also plan to open or announce additional probes into other tech giants, including Amazon and Facebook, which have faced similar U.S. antitrust scrutiny. The states’ effort is expected to be bipartisan and could include more than 30 attorneys general, one of the people said. Over the past year, regulators around the country have grown increasingly wary of the power wielded by Silicon Valley, questioning whether the industry’s access to vast amounts of proprietary data — and deep pockets — allow companies to gobble up rivals and maintain their dominance to the detriment of consumers. Two federal antitrust agencies have opened probes targeting the industry broadly, while lawmakers in Congress have grilled executives from Amazon, Apple, Facebook and Google about the business practices. (Amazon founder Jeff Bezos owns The Washington Post.) Outside of the nation’s capital, however, state officials also have started questioning the growing influence of big tech. Attorneys general in multiple states have threatened that competition probes could be on the horizon, The Post first reported in March, and states such as Louisiana and Mississippi have sharply criticized Google for its handling of users’ personal information and its algorithms for surfacing search results. Those states did not respond to requests for comment. Texas officials have raised similar concerns. They have also said that Google may be violating state consumer-protection laws if political bias at Google resulted in the censorship of conservative viewpoints. A spokesman for the attorney general there also did not respond to a request for comment. Over the summer, some attorneys general met privately with officials from the Justice Department, which announced its own broad review into big tech, to discuss their antitrust concerns. The agency’s antitrust leader, Makan Delrahim, later said at a conference in August that the federal government is coordinating with state leaders, which he numbered at more than a dozen, but declined to offer further details about the agency’s plans. It is unclear whether the Justice Department will join the states at the event, and a spokesman did not immediately respond to a request for comment. “Google’s services help people every day, create more choice for consumers, and support thousands of jobs and small businesses across the country,” spokesman Jose Castaneda said in a statement. “We continue to work constructively with regulators, including attorneys general, in answering questions about our business and the dynamic technology sector.” The states’ looming antitrust investigation of Google threatens to saddle the company with years of regulatory scrutiny, even though the federal government has the most powerful tools at its disposal — including the ability to try to break up a business for violating competition laws. But state attorneys general can contribute to federal action. For example, in the 1990s, the states helped build a broader case against Microsoft after rivals complained that it leveraged its Windows monopoly as it entered new markets and used it to erect barriers to competitors. “If multiple states — and I mean not just Democratic attorneys general but Republican attorneys general as well — are all looking into potential antitrust violations, one of the biggest effects might be to pressure the federal government to do a deeper dive,” said Doug Gansler, the former attorney general of Maryland and a top lawyer at the firm Cadwalader, Wickersham & Taft. For Google, the states’ heightened interest comes about six years after the U.S. government formally studied the tech giant’s search-and-advertising business but opted against slapping it with significant penalties. The inaction in the United States came to stand in stark contrast with Europe, which later issued a series of stinging, multibillion-dollar fines against the company for the way it displays search results and manages its Android smartphone operating system. The Justice Department and the Federal Trade Commission’s broad reviews into big tech could evolve into more formal probes of Google and its Silicon Valley peers. Senate lawmakers on Tuesday announced they would hold a hearing focused on tech giants that acquire smaller rivals.

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No Longer Enamored, Washington Looks Critically at Silicon Valley
Voice of America

URL: https://www.voanews.com/silicon-valley- ... con-valley
Category: Politics
Published: December 26, 2019

Description: SAN FRANCISCO - The era of Silicon Valley operating largely free from government regulation may be coming to an end. In 2019, lawmakers grilled tech executives at multiple hearings in Washington and federal regulators slapped record fines on tech firms. They promise action in the coming year on a host of issues: competition, online privacy, encryption and bias. U.S. tech companies such as Apple, Facebook, Google and Amazon are girding themselves for more federal scrutiny. “As the internet companies matured without a lot of regulation, some issues have emerged where attention is needed,” said Rep. Zoe Lofgren, a Democrat representing Silicon Valley since 1994 and who has introduced a national online privacy bill. “I think it’s fair enough to examine what kind of rules should be set in certain elements of the tech economy,” she said. For years, Washington was enamored with the technology industry and its iconic companies that fueled economic growth. They created new tools for campaigning and reaching voters, and enjoyed an aura of cool.
Online privacy and user data
Now, there are threats of fines over things such as violating users’ privacy or stifling competition. In 2019, the Federal Trade Commission issued a record $5 billion fine against Facebook for “deceiving users about their ability to control the privacy of their personal information.” It also issued a $170 million fine against Google for violating children’s privacy on YouTube, which Google owns. New laws, such as the one Lofgren proposes, could give American users more control over their online data and limit companies’ ability to collect user data. Those moves could limit companies’ ability to sell advertising, which funds the free internet.
Antitrust and competition
Both Democrats and Republicans criticize “Big Tech,” as it is now called. And in the coming year, the pressure will likely increase. “Whenever the word ‘Big’ is placed before your industry, it’s not a good thing,” said Carl Guardino, president and chief executive of the Silicon Valley Leadership Group, which represents many of the region’s tech firms. “It’s now ‘Big Tech,’ and you know it’s not used as a term of endearment.” Foreign users of American tech products could also see changes if Washington follows through on threats to break up large companies like Facebook. Presidential candidate Elizabeth Warren is reportedly drafting a bill to toughen the country’s rules about antitrust and competition. The Federal Trade Commission is reportedly looking into stopping Facebook’s further integration of Whatsapp and Instagram, in case it would one day see a need to break up the social network giant. Washington seems to have woken up to the dangers of technology companies that have become the gatekeepers of communications and commerce, said Sally Hubbard, the director of enforcement strategy at the Open Markets Institute, a research group that focuses on antitrust issues. “The traction has definitely really intensified over the last year,” she said. “There’s also just a growing awareness that these companies are causing a wide range of harms, whether it’s harms to our democracy, harms to innovation, harms to entrepreneurship. They are playing the game and controlling it, too.”
China and 5G infrastructure
Meanwhile, there is growing concern over China’s expanding role in advanced global communications and whether the authoritarian country can be entrusted with user data. The U.S. government has warned other countries not to work with the Chinese telecommunications giant Huawei, which sells equipment that is building the new 5G networks around the world. Much is at stake. With more than a majority of the Earth’s 7 billion people online, Washington’s rules for the U.S. technology industry and its global competitors could determine the future of communication.

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Justice Dept. files landmark antitrust case against Google
AP

URL: https://apnews.com/article/google-justi ... 5d4db06044
Category: Legal
Published: October 20, 2020

Description: WASHINGTON (AP) — The Justice Department on Tuesday sued Google for antitrust violations, alleging that it abused its dominance in online search and advertising to stifle competition and harm consumers. The lawsuit marks the government’s most significant act to protect competition since its groundbreaking case against Microsoft more than 20 years ago. It could be an opening salvo ahead of other major government antitrust actions, given ongoing investigations of major tech companies including Apple, Amazon and Facebook at both the Justice Department and the Federal Trade Commission. “Google is the gateway to the internet and a search advertising behemoth,” U.S. Deputy Attorney General Jeff Rosen told reporters. “It has maintained its monopoly power through exclusionary practices that are harmful to competition.” Antitrust cases in the technology industry have to move quickly, he said. Otherwise “we could lose the next wave of innovation.” Lawmakers and consumer advocates have long accused Google, whose corporate parent Alphabet Inc. has a market value just over $1 trillion, of abusing its dominance in online search and advertising to stifle competition and boost its profits. Critics contend that multibillion-dollar fines and mandated changes in Google’s practices imposed by European regulators in recent years weren’t severe enough and that structural changes are needed for Google to change its conduct. The Justice Department isn’t seeking specific changes in Google’s structure or other remedies at this point, but isn’t ruling out seeking additional relief, officials said. Google responded immediately via tweet: “Today’s lawsuit by the Department of Justice is deeply flawed. People use Google because they choose to -- not because they’re forced to or because they can’t find alternatives.” The case was filed in federal court in Washington, D.C. It alleges that Google uses billions of dollars collected from advertisers to pay phone manufacturers to ensure Google is the default search engine on browsers. Eleven states, all with Republican attorneys general, joined the federal government in the lawsuit. But several other states demurred. The attorneys general of New York, Colorado, Iowa, Nebraska, North Carolina, Tennessee and Utah released a statement Monday saying they have not concluded their investigation into Google and would want to consolidate their case with the DOJ’s if they decided to file. “It’s a bipartisan statement,” said spokesman Fabien Levy of the New York State attorney general’s office. “There’s things that still need to be fleshed out, basically,” President Donald Trump’s administration has long had Google in its sights. One of Trump’s top economic advisers said two years ago that the White House was considering whether Google searches should be subject to government regulation. Trump has often criticized Google, recycling unfounded claims by conservatives that the search giant is biased against conservatives and suppresses their viewpoints, interferes with U.S. elections and prefers working with the Chinese military over the Pentagon. Rosen told reporters that allegations of anti-conservative bias are “a totally separate set of concerns” from the issue of competition. Google controls about 90% of global web searches. The company has been bracing for the government’s action and is expected to fiercely oppose any attempt to force it to spin off its services into separate businesses. The company, based in Mountain View, California, has long denied the claims of unfair competition. Google argues that although its businesses are large, they are useful and beneficial to consumers. It maintains that its services face ample competition and have unleashed innovations that help people manage their lives. Most of Google’s services are offered for free in exchange for personal information that helps it sell its ads. Google insists that it holds no special power forcing people to use its free services or preventing them from going elsewhere. A recent report from a House Judiciary subcommittee, following a year-long investigation into Big Tech’s market dominance, concluded that Google has monopoly power in the market for search. It said the company established its position in several markets through acquisition, snapping up successful technologies that other businesses had developed — buying an estimated 260 companies in 20 years. The Democratic congressman who led that investigation called Tuesday’s action “long overdue” but said it’s important for the Justice Department to look beyond Google’s search business. “It is critical that the Justice Department’s lawsuit focuses on Google’s monopolization of search and search advertising, while also targeting the anticompetitive business practices Google is using to leverage this monopoly into other areas, such as maps, browsers, video, and voice assistants,” Rep. David Cicilline of Rhode Island said in a statement. The DOJ “filed the strongest suit they have,” said Columbia Law professor Tim Wu, who called it almost a carbon copy of the government’s 1998 lawsuit against Microsoft. He said via email that, for that reason, the DOJ has a decent chance of winning. “However, the likely remedies — i.e., knock it off, no more making Google the default — are not particularly likely to transform the broader tech ecosystem.” Other advocates, however, said the Justice Department’s timing — it’s only two weeks to Election Day — smacked of politics. The government’s “narrow focus and alienation of the bipartisan state attorneys general is evidence of an unserious approach driven by politics and is likely to result in nothing more than a choreographed slap on the wrist for Google,” Alex Harman, a competition policy advocate at Public Citizen, said in a statement. The argument for reining in Google has gathered force as the company stretched far beyond its 1998 roots as a search engine governed by the motto “Don’t Be Evil.” It’s since grown into a diversified goliath with online tentacles that scoop up personal data from billions of people via services ranging from search, video and maps to smartphone software. That data helps feed the advertising machine that has turned Google into a behemoth. The company owns the leading web browser in Chrome, the world’s largest smartphone operating system in Android, the top video site in YouTube and the most popular digital mapping system. Some critics have singled out YouTube and Android as among Google businesses that should be considered for divestiture. With only two weeks to Election Day, the Trump Justice Department is taking bold legal action against Google on an issue of rare bipartisan agreement. Republicans and Democrats have accelerated their criticism of Big Tech in recent months, although sometimes for different reasons. It’s unclear what the status of the government’s suit against Google would be if a Joe Biden administration were to take over next year. The Justice Department sought support for its suit from states across the country that share concerns about Google’s conduct. A bipartisan coalition of 50 U.S. states and territories, led by Texas Attorney General Ken Paxton, announced a year ago they were investigating Google’s business practices, citing “potential monopolistic behavior.” Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, South Carolina and Texas joined the Justice Department lawsuit.