U.S. Justice Department to start antitrust review of tech-giants

Author at TechGenyz Insights
Makan Delrahim Walking between the generalist

The Justice Department of the United States Federal Government has taken a decision to start an antitrust review of some of the technological mammoths of the world. This comes as a reaction to the growing discontent against some of the world’s biggest technology companies. Lawmakers and regulators have cooperatively been raising questions about Amazon, Apple, Facebook, and Google.

The antitrust review would investigate how such companies had accumulated market power and whether they had taken any unfair move to reduce competition, and especially examine whether they have harmed consumers. Such inquiries have also been posed by Congress and Federal Trade Commission.

Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands.The department’s antitrust review will explore these important issues – Makan Delrahim, head of the Justice Department’s antitrust division

Earlier, it was generally agreed that companies focused on consumer welfare, such as those offering lower prices or free services, did not have much reason to attract federal intervention. Google and Facebook, which provide free services, were not considered as requiring federal antitrust inspection. In recent times, however, many have raised concerns over the reach and the influence of internet giants like Amazon, Apple, Facebook, and Google.

David Cicilline who is a Democrat of Rhode Island and leads a subcommittee on antitrust law is of the opinion that the government has celebrated the new tech economy more than focusing on scrutinizing its corporate leaders.

Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight. As a result, the internet has become increasingly concentrated, less open and growingly hostile to innovation and entrepreneurship – David Cicilline, Representative, Democrat of Rhode

The Justice Department has recently been consulting tech industry experts in confidential meetings to learn the harmful potential of tech companies. It has not named any specific companies while announcing the review, but has stated that it would scrutinize the disquiet raised about social media, search and some retail services- this may indicate that it may possibly have its eye on Facebook, Google, and Amazon.

Attorney General William P. Barr has insisted that technology companies stop using advanced encryption and other security measures that transform devices into “law-free zones“. He might have indicated Apple and its iPhones through his remark.

I think we should be scrutinized. 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 – Timothy D. Cook, CEO, Apple

Sam Weinstein, a former antitrust official at the Justice Department and a professor at Cardozo Law School, found it unusual that the Justice Department announced its decision to execute antitrust review instead of carrying it out under wraps as it usually does.

Weinstein thinks that this announcement might have been made to show consumers that it is taking active action against the disquiet raised over the growing power and influence of tech giants, and also to ensure that competitors are aware that complaints against such companies would be received well.

He said that, “There is a lot of criticism of the agencies that they are not doing enough about big tech and this is a way to respond to that criticism.”

It has also been found that while major American technology companies have been able to fight shy of antitrust scrutiny to a great extent in the U.S., they have faced aggressive investigation around the world, especially in Europe. Earlier this year, Google was fined 1.5 billion euros by European authorities for antitrust violations in the online advertising market, and this was the third fine against Google by the European Union since 2017.

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