The US Department of Justice (DoJ) said it is to review whether “market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”
The antitrust investigation did not name any particular companies, but it is widely assumed it will include the likes of Facebook, Google, Amazon and maybe even Apple.
The probe is the latest regulatory issue a number of tech firms have had to deal with recently. Facebook for example is widely expected to have to pay up to a $5bn settlement with the Federal Trade Commission (FTC) over the Cambridge Analytica data sharing scandal.
According to the DoJ, “the Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online.”
It said the investigators will seek information from the public, “including industry participants who have direct insight into competition in online platforms, as well as others.”
“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. “The Department’s antitrust review will explore these important issues.”
Essentially, the investigation seeks to determine the competitive conditions in the online marketplace in an objective and fair-minded manner. It wants “to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want.”
The DoJ said that if violations of law are identified, it will proceed appropriately to seek redress.
It is worth remembering that the DoJ has sweeping powers, and can even break up companies if it deems that they are too dominant.
The DoJ probe has been a long time coming and was widely expected.
In June the US House of Representatives launched a probe into digital markets and “anti-competitive conduct” in the tech industry.
The US has been accused in the past of giving large tech companies a relatively free hand, even as in Europe firms such as Apple, Facebook and Google have been the target of wide-ranging probes and massive fines.
Last month democratic senator and presidential hopeful Elizabeth Warren who has previously warned that tech companies “have too much power over our economy, our society, and our democracy,” said that the head of the antitrust division within the US Department of Justice should not be involved in the competition investigation of Google and Apple.
She called on the DoJ’s antitrust division chief, Makan Delrahim, to recuse himself from the department’s antitrust investigations into Google and Apple.
Her reasoning is that his past lobbying for those two companies raised conflict of interest concerns.
Do you know all about IT and the law? Take our quiz.
'Madness' says Chinese state-backed media, as America pushes ahead with 'clean Internet' plan, with purge…
Ireland to get another data centre after the Chinese-owned short video app TikTok announces first…