The Justice Department has made it official: It is investigating the business practices of Big Tech, which it signaled Tuesday (July 23) may be harming consumers.
President Donald Trump has signaled such a review could be in the offing.
The Antitrust Division, headed by Makan Delrahim, said it is even now reviewing "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."
The wide-ranging investigation will include search, social media and some online retail, which means Google, Facebook, Twitter, and Amazon are almost certainly in that conversation.
The division will confer with the public and industry participants.
Delrahim has said that big is not necessarily bad, but Justice will look into whether or not that is the case with Big Tech.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Delrahim. “The Department’s antitrust review will explore these important issues.”
One argument has been that Big Tech bought its way to dominance with hosts of small deals that individually did not raise antitrust red flags.
"The goal of the Department’s 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," DOJ said. "If violations of law are identified, the Department will proceed appropriately to seek redress."
Earlier this year, Delrahim signaled that the fact that edge provider giants like Facebook or Amazon or Google are huge, or even if they are virtual monopolies, is not necessarily an antitrust issue unless they got that monopoly power through anticompetitive means or use that monopoly power anticompetitively.
As to their size, which in financial terms can be comparable to the GDP of small countries, "many of today’s large digital platforms have grown because they provide innovative and disruptive services that consumers seem to like and want to use," he said in delivering the keynote at the annual Silicon Flatirons tech policy conference at the University of Colorado Law School last February.
In an interview last month with Maria Bartiromo on the Fox Business Network, the President called both Twitter and Google biased and said they "should be sued," according to Fox. He said rather than the Mueller "witch hunt," it's those Big Tech platforms that should be investigated.
A number of Democrats have also argued that Big Tech needs breaking up, or at least shaking up. Those include presidential candidates Sen. Elizabeth Warren (D-Mass.) and Pete Buttigieg.
“For some time, I have been calling on the antitrust agencies to look into anticompetitive practices by the large online platforms as well as for increased transparency," said another presidential candidate and ranking member of the Senate Judiciary Subcommittee, Amy Klobuchar (D-Minn.). "The American people deserve to know whether these tech giants are unlawfully stifling competition and how our laws and enforcers can encourage innovation while protecting consumers. I will work to ensure that this review and any resulting investigations are thorough, public, and result in action that actually helps consumers.”
Sen. Josh Hawley (R-Mo.), one of Big Tech's biggest critics, tweeted his support for the investigation.
The Competitive Enterprise Institute jumped in to defend the Edge and criticize the investigation.
"The U.S. standard for antitrust action is consumer harm," said Jessica Melugin, CEI associate director, Center for Technology and Innovation. "It's going to be difficult to find consumer harm among these fiercely competing technology firms that deliver popular innovations and falling prices (sometimes even a price of zero dollars).
"What these antitrust investigations produce is mostly publicity for politicians, opportunities for competitors to rent-seek instead of competing in the marketplace, upward job mobility for career bureaucrats, and delayed and missed innovations for consumers.... The Department of Justice should stand down from investigating these dynamic and innovative technology companies."
“U.S. technology companies make the United States a global leader in innovation, power the economy, and deliver transformative benefits to people worldwide," said ITI The Global Voice of the Tech Sector. "As the Department of Justice explores the current state of competition in U.S. markets with respect to the tech industry, it should do so with precision and be consistent with existing law, and avoid harming America’s economy and innovative edge.”