101°F
weather icon Clear

Big technology companies subject of federal antitrust probe

Updated July 23, 2019 - 7:59 pm

WASHINGTON — The U.S. Department of Justice opened a sweeping antitrust investigation of major technology companies and whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.

It said the probe will take into account “widespread concerns” about social media, search engines and online retail services. Its antitrust division is seeking information from the public, including those in the tech industry.

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Makan Delrahim, the department’s chief antitrust officer, said in a statement. “The Department’s antitrust review will explore these important issues.”

The terse but momentous announcement follows months of concern in Congress and elsewhere over the sway of firms like Google, Facebook and Amazon. Lawmakers and Democratic presidential candidates have called for stricter regulation or even breakups of the big tech companies , which have drawn intense scrutiny following a series of scandals that compromised users’ privacy.

Facebook may soon face a significant judgment from the Federal Trade Commission over its privacy practices, one that will reportedly include a $5 billion fine and impose other limits on its operations. The FTC also reportedly plans to hand Google a multimillion dollar fine over its handling of children’s information on YouTube. Europe has investigated and fined several major tech companies over the past several years.

“It seems like the nation’s law enforcement agencies are finally waking up to the threat posed by big tech,” said Stacy Mitchell of the Institute for Local Self-Reliance, which has criticized Amazon for stifling independent businesses. Mitchell testified at a House hearing last week.

President Donald Trump also has repeatedly criticized the big tech companies by name in recent months. He frequently asserts, without evidence, that they are biased against him and conservatives in general.

But Big Tech could also present a difficult target, as current interpretations of antitrust law don’t obviously apply to companies offering inexpensive goods or free online services. The Justice Department did not name specific companies in its announcement.

The Justice investigation 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.

Major tech companies already facing that congressional scrutiny declined to comment on the Justice Department’s probe. Amazon and Facebook had no comment. Apple and Google referred inquiries to public statements by their executives.

Shares of Facebook, Amazon and Apple were down slightly in after-hours trading.

Traditional antitrust law focuses on dominant businesses that harm consumers, typically defined as price-gouging and similar behaviors. But many tech companies offer free products that are paid for by a largely invisible trade in the personal data gleaned from those services. Others like Amazon offer consistently low prices on a wide array of merchandise.

“That is going to be a tough one for (regulators) to prove,” said University of Pennsylvania law professor Herbert Hovenkamp.

Beyond that, the companies could face scrutiny for buying up smaller rivals that might be a threat to their business. Last week, Cicilline accused industry giants of creating a “startup kill zone” to insulate them from competition.

For instance, Google bought YouTube in 2006 when it was still a fledging video site struggling to survive an onslaught of copyright infringement lawsuits, and acquired the technology for its now-dominant Android software for smartphones in an even smaller deal. Facebook snapped up Instagram — now the fastest-growing part of its business — in its infancy, and Apple bought the technology powering its ubiquitous Siri assistant.

The Trump-era Justice Department has already tried to push the bounds of antitrust law, albeit unsuccessfully. The government sued to block AT&T’s acquisition of Time Warner, arguing that the combined company could hike prices for programming, to consumers’ detriment, but lost the case both in lower court and on appeal.

In his January confirmation hearings, Attorney General William Barr acknowledged curiosity about how Silicon Valley giants grew so huge “under the nose” of antitrust enforcers. “You know, you can win that place in the marketplace without violating the antitrust laws,” he said. “But I want to find out more about that dynamic.

Trump has been a fierce critic of AT&T, which owns CNN, in addition to many large tech companies. At various times, he has publicly criticized Google, Facebook, Apple and Amazon for allegedly shady, biased or unpatriotic behavior.

Ortutay reported from San Francisco. AP technology reporters Michael Liedtke and Rachel Lerman contributed from San Francisco. AP Technology reporter Matt O’Brien reported from Providence, Rhode Island.

Don't miss the big stories. Like us on Facebook.
Politics Videos
Media's Double Standard On Incitement And Trump - Video
Over the weekend, an Elizabeth Warren-supporting socialist who opposed gun violence used a rifle to commit a mass murder in Dayton, Ohio. The media has downplayed that aspect of the tragedy.
Project Our Care Tour Kicks Off In Las Vegas
U.S. Rep. Dina Titus joined health care advocates and local residents as part of Protect Our Care’s nationwide bus tour kick off in Las Vegas on Monday, August 5, 2019. (Mat Luschek / Review-Journal)
Bernie Sanders talks about guns, response to El Paso shooting
Sen. Bernie Sanders spoke about his response and continued policy ideas about guns and gun control to the Review-Journal after a panel of other topics. (Rachel Aston/Las Vegas Review-Journal)
Pete Buttigieg On Gun Control And Climate Change - Video
Pete Buttigieg talks about his campaign for the 2020 election and how Nevada is a vision of what the future can be.
Beto O'Rourke speaks in Las Vegas
Presidential candidate Beto O'Rourke spoke to supporters at the East Las Vegas Community Center in Las Vegas, Thursday, Aug. 2, 2019. (Las Vegas Review-Journal)
Former Nevada Senate leader Kelvin Atkinson sentenced to prison
Former Nevada Senate Majority Leader Kelvin Atkinson, who pleaded guilty to misusing campaign funds, was sentenced to 27 months in prison on Thursday, July 18, 2019. (Mat Luschek/Las Vegas Review-Journal)
Trumps Strength is also a Weakness - Video
One of Donald Trump’s greatest strengths — his ability to shape national narratives — is also a great weakness.
Tax the Rich Bus Tour makes a stop in Las Vegas - Video
The Tax the Rich Bus has stopped in Las Vegas as part of its summer tour. (Las Vegas Review-Journal)
Assemblywoman Daniele Monroe-Moreno hosts BBQ - Video
Assembly Woman Daniele Monroe-Moreno hosts BBQ to bring the community together to hear about the candidates up for election and for people to gather and have fun.
Democrat Virtual Caucus - Video
Elizabeth Warren visits Las Vegas
Senator Elizabeth Warren made a campaign stop at the East Las Vegas Community Center on Tuesday July 2, 2019. (Mat Luschek / Review-Journal)
Aaron Ford Speaks About Bill AB431
AB431 is a bill sponsored by Nevada Assembly Speaker Jason Frierson to restore the right to vote for formerly incarcerated individuals. Attorney General Aaron Ford spoke at the AM&E Church in North Las Vegas about the bill, on Monday, July 1, 2019. (Mat Luschek/Las Vegas Review-Journal)
The Right Take: Biden's Racially Questionable Comments
Joe Biden has uttered racially charged statements for years. Now that he’s the frontrunner for the Democrat presidential nomination, he may finally face prolonged scrutiny for them.
Christopher Rufo Discusses Homelessness In The USA - VIDEO
Christopher Rufo discusses homelessness in the United States and how politicians can work to improve conditions for those with drug addictions.
Clark County 2019 Election Results - Video
The 2019 Elections wrap up in Clark County including an upset in the Boulder City Mayor race.
Olivia Diaz talks about her win in Ward 3 - VIDEO
Las Vegas City Councilwoman-elect Olivia Diaz talks about her election win in Ward 3 and what lies ahead for her.
Greene discusses Read by 3 and Opportunity Scholarships - VIDEO
The Nevada Legislative Session is over and the results are mixed for Nevada students, according to Tom Greene, Senior regional legislative director, Excel in Ed in Action.
Bernie Sanders visits Las Vegas
Sen. Bernie Sanders made a stop at Roy W. Martin middle school on Thursday, during his campaign trail.
THE LATEST
Trump facing limits of go-it-alone stance at G-7 summit

The annual G-7 summit has historically been used to highlight common ground among the world’s leading democracies.

Nevada corrections workers file for union recognition

Nevada corrections workers filed to be recognized as a union affiliated with the American Federation of State, County and Municipal Employees, the first group of state workers to take advantage of a new law that allows for collective bargaining.

Putin orders Russia military response to US missile test

President Vladimir Putin ordered the Russian military on Friday to work out a quid pro quo response after the test of a new U.S. missile banned under a now-defunct arms treaty.