The Department of Justice on Tuesday announced it is opening a wide-ranging antitrust review of “market-leading online platforms,” an unprecedented probe of the tech industry that could heighten calls for Amazon, Facebook and Google to be broken up.
The effort aims to explore “widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online,” according to the agency. It did not mention any major tech giant by name, but its stated interests track closely with Google’s dominance in search, Facebook’s leadership in social media and Amazon’s position as the country’s e-commerce leader. All three control vast amounts of data that give them an edge over smaller rivals, critics say.
Justice Department officials said they would “seek redress” if in the course of their investigation they find tech companies committed violations of federal competition laws.
The review taps into intensifying, bipartisan fears that tech giants have grown too large and powerful, threatening rivals, harming consumers and undermining innovations. It could sweep up the whole of Silicon Valley into the government’s regulatory crosshairs, a broad inquiry that mirrors Justice Department probes from generations ago into entire industries, such as oil and gas.
“It looks like the antitrust winter is over,” said Columbia University law professor Tim Wu, who chronicled the subject in his book “The Curse of Bigness: Antitrust in the New Gilded Age.”
Amazon and Facebook declined to comment. Google declined to comment on the DOJ probe but pointed to previous testimony to Congress stressing it doesn’t threaten competitors. Amazon founder and chief executive Jeff Bezos owns The Washington Post.
The nascent probe appears to differ from a targeted government investigation into how Apple, Amazon, Google and Facebook may have acted anti-competitively. Another Washington antitrust agency, the Federal Trade Commission, recently created a special task force to examine industry competition issues.
The new effort is led by Makan Delrahim, the DOJ’s assistant attorney general for antitrust, who raised concerns in a statement Tuesday that “digital platforms may act in ways that are not responsive to consumer demands.”
In recent months, Delrahim appeared to offer a road map for the government’s coming review. Speaking at a conference in Israel, he warned that Washington would take a broad view of what constitutes a threat to competition. He pointed to the U.S. government’s case against Microsoft in the 1990s to show that federal regulators “already have in our possession the tools we need to enforce the antitrust laws in cases involving digital technologies.”
To start, DOJ officials are planning a meeting this week with attorneys general from states such as Colorado, Nebraska and Iowa to examine the potential for bringing state-level cases against tech giants, according to two people familiar with the meetings who spoke on the condition of anonymity because they were not authorized to discuss the matter publicly. Some of those states have urged the federal government to open competition probes of tech giants, and many attended a private gathering hosted by the Justice Department in September to discuss the power of online platforms, including concerns about competition, privacy and free speech.
The department declined to provide further details about its plans.
The probe comes at the beckoning of Democrats and Republicans. President Trump has repeatedly swiped at Silicon Valley in recent months, at one point last month threatening unspecified lawsuits against Facebook and Google. Earlier this month, Trump convened a summit at the White House during which he attacked the industry for what he called the censoring of conservatives — and pledged to explore “all regulatory and legislative solutions to protect free speech.”
But many Democrats seeking the White House in 2020 have signaled their interest in probing tech companies, too. Sen. Elizabeth Warren (Mass.) has been the most aggressive, calling for tech giants to be broken up. And Democrats and Republicans have joined on Capitol Hill to launch an investigation into Apple, Amazon, Facebook and Google on competition grounds, holding a hearing with all four companies earlier this month.
“Antitrust enforcers must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power,” Sen. Richard Blumenthal (D-Conn.) said in a statement. “I have called for this kind of inquiry repeatedly and hope that Department of Justice enforcers will match their rhetoric with real action.”
Gene Kimmelman, a former DOJ antitrust official now working as a senior adviser to the public interest advocacy group Public Knowledge, said Silicon Valley is ripe for a closer examination of the power of its dominant companies.
“This is a welcome step to shine a light on whether there’s antitrust problems and whether there needs to be updated laws to promote competition,” Kimmelman said.
But the president’s attacks prompted concerns among some experts about the rationale for the new review.
Thinking ahead to the 2020 election, “if the Democrats are going to stake out an aggressive antitrust platform, this is a way for Republicans to neutralize it politically without actually doing anything,” said Robert Litan, a partner in the law firm Korein Tillery and former deputy assistant attorney general in the Justice Department’s antitrust division who helped prosecute Microsoft. “Another way to read this is that the administration doesn’t like any of these tech firms because they think they all lean Democratic and stifle conservative voices, and this is just pure, raw-knuckles payback.”
Before Tuesday’s announcement, federal regulators had divvied up scrutiny of Silicon Valley in a move that also presaged more formal antitrust probes. The Justice Department assumed responsibilities for Apple and Google, while the Federal Trade Commission took on Amazon and Facebook. Experts said they did not believe the DOJ’s broad look at the tech industry affected the two agencies’ work, which is still in its preliminary stages.