Why the US is finally investigating Facebook, Amazon and Google over market dominance
Department of Justice to review ‘widespread concerns’ that tech firms hold a monopoly of power
The US Department of Justice (DoJ) has launched an investigation into the country's major tech firms over growing fears they have become too powerful.
The department’s antitrust arm announced on Tuesday that it intends to review the world’s biggest “online platforms” in a bid to assess whether they have risen to power through “illegal practices” that have made it difficult for smaller firms to succeed, The Daily Telegraph reports.
Though no companies were directly identified by the DoJ, the Telegraph names Amazon, Facebook and Google among the possible tech firms in the department’s firing line.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“The department’s review will consider the widespread concerns that consumers, businesses and entrepreneurs have expressed about search, social media, and some retail services online”, a DoJ spokesperson said.
Makan Delrahim, assistant attorney general of the DoJ’s antitrust division, added that “digital platforms may act in ways that are not responsive to consumer demands” without the “discipline of meaningful market-based competition”.
Why has the review been launched?
The review comes after fresh calls from US lawmakers, including Democratic presidential hopeful Elizabeth Warren, who believe market-leading companies should face more scrutiny.
Three of the companies believed to be at the centre of the review - Amazon, Facebook and Google - faced a “grilling” in the US Congress last week over the power they wield on markets that include “digital advertising, e-commerce and cloud computing”, The Guardian says.
During the hearing, Amazon executives were questioned over whether fees imposed on third-party sellers using the platform “create a monopoly of power”, The Guardian adds. Facebook, meanwhile, was probed over “copying features of companies that decline to be acquired.”
The investigation also comes off the back of numerous penalties imposed on tech giants for violating antitrust laws outside of the US.
Google, for example, has been handed a trio of major fines by the European Union totalling €8.2bn (£7.3bn) over the past three years for breaking antitrust laws. The tech firm was deemed to have used its Android mobile operating system to abuse its “dominance” in the smartphone market and “forced its AdSense customers” only to use Google’s services.
The announcement marks a “policy shift” by the US government, which has traditionally let “Big Tech” run its course with little restriction, The Sunday Times notes.
What’s been the response?
Speaking to the Financial Times, David Balto, a former policy chief at the US Federal Trade Commission (FTC), said the announcement shows that the DoJ is taking sole responsibility in challenging today’s major tech companies.
“It would seem to be a poor use of government resources” if the FTC were to get involved with the probe, he said.
However, Balto said that any legal sanctions against the tech companies could still be a long way off, despite the growing number of politicians - including President Trump - calling for swift action.
“There is a tremendous distance between the concerns that are being raised and the conclusion by a court that consumers have been harmed”, he said.
Meanwhile, Daniel Ives, an analyst at Los Angeles-based research firm Wedbush Securities, told the BBC that the DoJ’s announcement was a “major shot across the bows” for tech firms.
But it’s unlikely that the DoJ will give in to Warren’s calls to break up the big tech firms, he added. Instead, Ives believes that the review will result in a few “business model tweaks” or financial penalties.
The tech companies believed to be at the centre of the review have yet to comment.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Today's political cartoons - November 3, 2024
Cartoons Sunday's cartoons - presidential pitching, wavering convictions, and more
By The Week US Published
-
Why Man United finally lost patience with ten Hag
Talking Point After another loss United sacked ten Hag in hopes of success in the Champion's League
By The Week UK Published
-
Who are the markets backing in the US election?
Talking Point Speculators are piling in on the Trump trade. A Harris victory would come as a surprise
By The Week UK Published
-
Google loses antitrust suit, declared 'monopolist'
Speed Read A federal court has ruled that Google illegally dominated the internet search industry
By Rafi Schwartz, The Week US Published
-
Britain's new retail returns nightmare
In The Spotlight Gen Z influencers and a 'poopy diaper' have shown up fault-lines in the system
By Chas Newkey-Burden, The Week UK Published
-
Saks buys Neiman Marcus in $2.65B deal
Speed Read Following the merger of the two legacy retailers, the new entity will be called Saks Global
By Peter Weber, The Week US Published
-
Retail media is seeing a surge this year
The Explainer Amazon now makes more money from advertising than Coca-Cola's global revenue
By Justin Klawans, The Week US Published
-
Amazon vs. the FTC: behind the monumental antitrust showdown
Under the Radar The Federal Trade Commission is taking on the e-commerce giant for allegedly building a monopoly in the online market
By Theara Coleman, The Week US Published
-
Amazon, the 'everything store,' goes to court
Feature Does the retail and tech giant actually have a monopoly or is that argument a bit of a stretch?
By The Week Staff Published
-
Why the FTC antitrust lawsuit against Amazon is so consequential
Talking Point While it's not the first case the federal agency brought against the company, it might be the biggest challenge yet
By Theara Coleman Published
-
Amazon slashes its way to higher profits
feature The tech giant has had a tough few years. But are things on the up and up?
By The Week Staff Published