US investigates digital technology firms’ business practices

The U.S. Justice Department announced on Tuesday it was opening an investigation of major digital technology firms into whether they engage in anti-competitive practices.
going-digital
The investigation will look into whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

Justice Department did not identify specific companies but said the review would consider concerns raised about search, social media, and some retail services online — an apparent reference to Alphabet’s Google, Amazon.com and Facebook, and potentially iPhone maker Apple and Microsoft.

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

Federal Trade Commission is set to announce a $5 billion penalty to Facebook for failing to properly protect user privacy, Reuters reported.

Senator Richard Blumenthal, a Democrat, said the Justice Department must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power.

In June, Reuters reported the Trump administration was gearing up to investigate whether Amazon, Apple, Facebook and Alphabet’s Google misuse their massive market power, setting up what could be an unprecedented, wide-ranging probe of some of the world’s largest companies.

The Justice Department said the review “is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.”

Democrats and Republicans on Capitol Hill alike are expressing growing concerns about the size of the largest tech firms and their market power. Democratic Presidential candidate Elizabeth Warren has called for breaking up companies like Amazon, Apple, Google and Facebook and unwinding prior acquisitions.

“There is growing consensus among venture capitalists and startups that there is a kill zone around Google, Amazon, Facebook and Apple that prevents new startups from entering the market with innovative products and services to challenge these incumbents,” said Representative David Cicilline, a Democrat who heads the subcommittee.

Apple CEO Tim Cook told CBS News last month that scrutiny was fair but “if you look at any kind of measure about is Apple a monopoly or not, I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly. Our share is much more modest. We don’t have a dominant position in any market.”

Google’s Adam Cohen told the House Judiciary subcommittee last week that the company had “created new competition in many sectors, and new competitive pressures often lead to concerns from rivals.”

U.S. President Donald Trump has called for closer scrutiny of social media companies and Google, accusing them of suppressing conservative voices online, without presenting any evidence.

0 0 vote
Article Rating
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments