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Big Tech Antitrust Scrutiny Extends to Facebook and Apple Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In
(about 3 hours later)
WASHINGTON — Apple and Facebook are confronting a new wave of government scrutiny, as regulators have decided that the Justice Department will oversee antitrust complaints about Apple and the Federal Trade Commission will oversee complaints about the social network, according to two people with knowledge of the matter. WASHINGTON — The federal government is stepping up its scrutiny of the world’s biggest tech companies, as regulators divvy up oversight of the Silicon Valley giants and Democratic lawmakers move to investigate whether they have stifled competition.
The oversight is part of a broader effort by the Justice Department and the F.T.C. to divide up antitrust enforcement duties for many of the industry’s biggest companies, including Google and Amazon. Regulators appear interested in Google’s advertising and search business. Some consumer groups and vendors argue that Amazon blunts competition. After recent negotiations, the Justice Department will handle Apple and Google, while the Federal Trade Commission will take Facebook and Amazon.
The divvying of antitrust enforcement does not mean that the agencies have opened official investigations. But the moves illustrate the growing discomfort by American regulators and some politicians with the enormous power that a handful of Silicon Valley’s businesses wield. Democratic lawmakers in the House said on Monday that they were looking into concerns that could lead to the first overhaul of antitrust rules in decades, in a push to keep pace with a rapidly changing industry.
Regulators have struggled to keep pace with the growth of technology companies, which dominate large portions of the economy. Facebook is at the center of millions of people’s online social lives. Amazon is the de facto force in online retailing. Google is the starting point for many people searching online. Apple has tremendous influence on app developers. The focus on antitrust, long relegated to academic debates and industry griping, has now entered the political world, leaving the tech giants potentially vulnerable to new regulations and federal lawsuits.
Competitors and academics have raised complaints about the biggest tech companies for years, but have gotten little for their efforts in the United States. Now, though, the debate is moving into politics. Silicon Valley has faced fierce criticism in recent years over disinformation, privacy breaches and the misuse of data. President Trump regularly criticizes the power of the companies, as do several Democrats running for president.
The two agencies began negotiations a few weeks ago over the companies and issues related to competition in the tech sector. It does not appear that the agencies have launched official investigations into the companies at this time. But with the agencies’ new assignments to explore competition in search, e-commerce and social networking, the move is the most aggressive step so far by American regulators to scrutinize the rapid growth of Facebook, Amazon and Google. The prospect of action pummeled technology stocks on Monday. Shares of Facebook fell more than 7 percent on Monday afternoon. Google and Amazon shares were also sharply lower. Apple’s stock fell about 1 percent.
The F.T.C. and Justice Department declined to comment Monday. Facebook and Apple also declined to comment. Lawmakers and regulators have long struggled to keep pace with technology companies, which dominate large portions of the economy. But concerns about the businesses have been building, most notably since the 2016 presidential election.
The F.T.C. is approaching the end of an investigation into Facebook’s handling of data privacy, and the company is expected to pay up to $5 billion in a settlement. Any look into antitrust issues would be separate from that inquiry. Facebook and Google have attracted scrutiny for how they handle user data, and for perceived political bias on their platforms. Apple wields tremendous influence over software developers and what can appear on its devices. And Amazon, by far the leading online retailer, is often accused of stifling competition.
The F.T.C. is also close to the completion of a privacy investigation into Google that has lasted more than year. The agency approved Facebook’s acquisitions of the picture-sharing site Instagram in 2012, and the messaging app WhatsApp in 2014. The F.T.C.’s antitrust authorities have experience with Amazon, with the agency’s approval of the e-commerce giant’s purchase of Whole Foods in 2017. The moves from regulators and lawmakers are preliminary. But they will almost certainly lead to years of headaches for the companies. They also raise the prospect of aggressive actions in the future, like a lawsuit to break up a company, or a law limiting the reach of the companies.
[Read more about the storm brewing over big tech.] “This is about how do we get competition back in this space,” Representative David Cicilline, Democrat of Rhode Island, said Monday in a news conference. Mr. Cicilline is the chairman of the House Judiciary’s subcommittee on antitrust, which will conduct the investigation.
Shares of Facebook were down more than 7 percent on Monday afternoon. Google and Amazon were also sharply lower. Apple was down slightly. He said the investigation would focus on major digital platforms. The House committee on Monday informed four tech companies, Google, Apple, Facebook and Amazon, of the plans, Mr. Cicilline said.
“This is long overdue,” he said.
The F.T.C. and Justice Department declined to comment Monday. All four companies have also declined to comment.