Justice Department to Open Antitrust Review of Big Tech Companies

Attorney General William Barr has asked how some Big Tech companies took shape ‘under the nose of the antitrust enforcers.’ PHOTO: ALEX WONG/GETTY IMAGES

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.

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Source: Wall Street Journal