Too big? US DoJ to investigate Apple, Amazon, Facebook and Google

Martyn Warwick
By Martyn Warwick

Jul 24, 2019

via Flickr © wwarby (CC BY 2.0)

via Flickr © wwarby (CC BY 2.0)

  • Antitrust probe will look into allegations of the unlawful suppression of competition...
  • ... As well as the stifling of innovation and harming consumers
  • Calls for the break-up of the Big Four are intensifying
  • DoJ will speak softly but carry a big stick

The US Justice Department (DoJ) is to conduct a wide-ranging and deep investigation into the manifold oft-repeated allegations that huge technology and social media companies including the likes of Amazon, Apple, Facebook and Google have been and are unlawfully suppressing competition. The antitrust investigation will be overseen by US Attorney General William Barr and will focus on those companies that dominate and indeed in many respects monopolise Internet search services and apps, social media platforms and retail services.

In a statement the DoJ said it is cognisant of "widespread concerns that have been raised about search, social media and retail services online" and thus will "look into how [Internet and social media] platforms have achieved their market power, and whether they are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers". No individual companies are named directly but it is obvious who the main targets will be. 

The new Justice Department inquiry will have more power and reach than that given earlier to the Federal Trade Commission (FTC), whose scrutiny of big tech is regarded as partial. William Barr's first task will be to determine whether the companies being investigated are in breach of antitrust laws before moving on to examine the detail of corporate practice and compliance.

The head of the antitrust division of the Justice Department, Makan Delrahim, commented, "Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands. The department’s antitrust review will explore these important issues."

In point of fact, the investigation (or part of it) has been underway for a while. Recently some of the leading critics of the behaviour of the likes of Facebook and Google who are agitating for them to be broken-up, were invited to private meetings at the Justice Department to air their views and adduce evidence to support them.

Certainly public concern about the ways in which the Big Four tech companies harvest, store and manipulate consumer data is growing, particularly in light of several major security and data breaches over the past few years while privacy, consumer advocacy groups, lawyers and even some politicians are expressing increasing concerns about the social influence and economic power they have and the lack of regulatory and legislative oversight.

As might be expected President Donald Trump has also weighed-in to the argument and has tweeted that the Attorney General should sue Facebook and Google. However, his attitude has little to do with misuse of personal data or monopoly-like market domination and more to do with his perception that they take every opportunity to criticise him. 

There have been allegations against me, and I know who the alligators are

At his Senate confirmation hearing prior to his appointment as US Attorney General, William Barr, speaking on the subject of antitrust concerns with reference to the big technology and social media companies, told the panel, “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. You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”

He's not alone.

In line with Theodore Rosoevelt's dictum of "speak softly but carry a big stick", the new investigation will, initially at least, ask industry participants voluntarily to submit to questioning. However, should anyone decline, the investigators have the power to compel witnesses to give evidence under subpoena if necessary. Let's hope that should ageing wunderkind founder of Facebook, Mark Zuckerberg, be forced to appear in public again at a public hearing he will face a real grilling and be made to answer questions properly. And perhaps this time he won't be allowed to sit on his ludicrous little boy's booster seat. 

The news of the new DoJ enquiry comes as an earlier investigation by the FTC has ended with Facebook being slapped with a US$5 billion fine (the biggest the agency has ever imposed but no more than a gnat bite to Facebook) for blatant and continued misuse of users' data.

Allegations included claims that Facebook gave other companies access to user phone numbers without their consent and deliberately made it almost impossible for consumers to turn off facial recognition technology. In addition to the fine, the FTC has required Facebook to change the way  it stores and manipulates user data and to be "more transparent" in its practices in future. Good luck making that happen."Through a glass darkly" and all that.

Meanwhile, with the clock already counting down to the initial primary skirmishes for the US Presidential election in 2020, Democrat hopefuls are united in their concerns that big tech companies, that act both as platform providers in their own right for other online enterprises and also deliver their own competing services, are too big for their boots, under-regulated and basically a law unto themselves alone. Indeed,  Elizabeth Warren, a Senator from Massachusetts, is calling for Facebook and its ilk to be broken up, preparatory to changing their status to that of federally-regulated utility companies.

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