The U.S. Department of Justice opened a sweeping antitrust investigation of big technology companies and whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.
It comes as a growing number of lawmakers have called for stricter regulation or even breaking up of the big tech companies, which have come under intense scrutiny following a series of scandals that compromised users’ privacy.
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.
The focus of the investigation closely mirrors a bipartisan probe of Big Tech undertaken by the House Judiciary subcommittee on antitrust. Its chairman, Rep. David Cicilline, a Rhode Island Democrat, has sharply criticized the conduct of Silicon Valley giants and said legislative or regulatory changes may be needed. He has called breaking up the companies a last resort.
Google and Apple declined to comment, referring to prior statements by executives, while Facebook and Amazon did not immediately comment
Shares of Facebook, Amazon and Apple were down slightly in after-hours trading.
The announcement comes a day before the Federal Trade Commission is set to announce a five billion U.S. dollars’ penalty to Facebook for failing to properly protect user privacy.
One antitrust expert believes the DOJ investigation may prompt regulators to interpret U.S. competition law in new ways.
University of Pennsylvania law professor Herbert Hovenkamp said the companies may have been their abusing market power by collectively buying hundreds of startups in recent years to devour their technology and prevent them from growing into formidable rivals.
Traditionally, antitrust regulators have only sought to block acquisitions involving large companies in adjacent markets. But Hovenkamp says U.S. antitrust law is broad enough for regulators to consider the potential damage wrought by relatively small deals, too.
Earlier, the Washington Post reported that the Federal Trade Commission will allege that Facebook misled users about its privacy practices as part of an expected settlement of its 2018 Cambridge Analytica scandal.
The federal business watchdog will reportedly find that Facebook deceived users about how it handled phone numbers it asked for as part of a security feature and provided insufficient information about how to turn off a facial recognition tool for photos.
Advertisers were reportedly able to target users who provided their phone number as part of a two-factor authentication security feature.