The U.S. Department of Justice (DOJ) announced this week that the Department’s Antitrust Division is reviewing “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 investigation will look into large technology companies with online services, including Amazon, Apple, Google and Facebook.
The DOJ noted in a press release that over the past few years, concerns about search, social media, advertising-related tracking technologies and the practices of some online retail companies have grown significantly.
Assistant Attorney General Makan Delrahim of the Antitrust Division said:
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands.”
This Isn't Tech Giants' First Antitrust Rodeo
Some of these tech giants have already been involved in other antitrust cases. For instance, Google was reviewed in 2011, and the FTC’s investigators ended up recommending antitrust action against the company over their findings, which included anti-competitive tactics that allegedly led to the death of Google Maps competitor Skyhook. However, Google escaped an antitrust lawsuit at the last minute, with FTC Chairman at the time Jon Leibowit ruling against the lawsuit.
Google wasn’t so fortunate in the European Union (EU), where the European Commission launched not one, but three antitrust cases against the company related to its shopping comparison service, Android domination and Google Ads' anti-competitive practices.
Facebook’s largest privacy scandal exploded last year with the revelations about its relationship with Cambridge Analytica, a firm that exploited Facebook’s data APIs to build political profiles on users and manipulate them through ads.
The FTC has now found that Facebook violated its previous settlement with the FTC on multiple occasions, including when it lied to users about facial recognition being turned off and when it was asking users for phone numbers for “security purposes” and then using those numbers for advertising purposes.
The DOJ may also review Amazon’s e-commerce practices. Meanwhile, the EU has recently announced its own antitrust investigation into Amazon, accusing the company of anti-competitive tactics against sellers of its own platform, as well as data collection practices that may violate the EU's General Data Protection Regulation (GDPR).
The Supreme Court recently ruled that Apple can be sued by its own customers (and not just iOS developers, as Apple would have preferred) over antitrust issues connected to its App Store. The Supreme Court said that Apple’s 30% fee on each application is an abuse of monopoly power, because the fee is passed down to its customers, inflating prices.
Usually, it's the FTC that prosecutes antitrust cases; the DOJ hasn't had a high-profile antitrust case since it prosecuted Microsoft in 2011. This could be read in different ways: perhaps the DOJ is as serious about these cases as it was about the Microsoft case. Or maybe it's trying to gain points with a public growing weary of the power of tech giants.