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

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

Postby smix » Mon Jun 03, 2019 10:59 pm

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.



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.



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 Judiciary launches antitrust investigation into tech giants

Postby smix » Tue Jun 04, 2019 1:05 am

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 to Open Broad, New Antitrust Review of Big Tech Companies

Postby smix » Wed Jul 24, 2019 10:16 am

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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