Days after word leaked that the Justice Department is investigating Google for possible antitrust violations, Reuters reports
today that the DOJ has been given the green light to include Apple as part of a wider antitrust investigation. In fact, the report notes that both the Federal Trade Commission (FTC) and the DOJ will each get jurisdiction of two major tech companies. The FTC will decide whether to probe Facebook and Amazon while the DOJ will consider examining Apple and Google. If both regulatory agencies decide to open investigations on the four companies, they will be looking for evidence of antitrust violations.
Any investigation would be time-consuming and three out of the four companies have already received a tweet lashing from President Donald Trump. Last August, the president accused Google of gaming its search results against him
so that stories that he calls "Fake News" would appear at the top when "Trump News" was searched for on Google. Months before that, the president was reportedly obsessed with Amazon and its CEO Jeff Bezos. Not only is Bezos the wealthiest man in the world (pre alimony), he owns the Washington Post
, a newspaper that often criticizes Trump. And the president's wealthy friends are complaining that Amazon is hurting business in the malls that they own. As for Apple, Trump wants the iPhone manufacturer to assemble its products in the states. The only tech firm of the four facing investigation that Trump doesn't talk about is Facebook; the latter faces a fine as large as $5 billion for violating an FTC consent decree it signed back in 2011. 87 million Facebook users had their private information collected by Steve Bannon's Cambridge Analytica
and used by the Trump campaign.
But going after big tech is a game that lawmakers on both sides of the aisle want to play. Talking about Google, Apple, Facebook and Amazon, Senator Richard Blumenthal (D-Connecticut) says, "Their predatory power grabs demand strict & stiff investigation & antitrust action." Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.) states that the business models of Facebook and Google need to be examined. And Senator Marsha Blackburn (R-Tennessee) echos Graham by calling for a "deeper dive" into tech companies.
U.S. regulators most likely won't seek to break up these large technology firms
Google is accused of putting up search results that favor its own products ahead of competitors. It also has been scolded for requiring phone manufacturers who want the Google Play services version of Android to install Google Search and Google Chrome on their handsets. Besides its many privacy lapses, Facebook has been accused of allowing misleading posts and "fake news" on its platform.
There has been speculation that the U.S. government will seek to smash Facebook into several smaller companies
Apple could be investigated in the states for forcing companies like Spotify to pay an "Apple tax" or 30% of the revenue it generates from the Apple App Store. This is Apple's cut for revenue generated by developers in the App Store. This has forced Spotify to raise its prices in the App Store above those that Apple charges for its own Apple Music. The EU is currently investigating Spotify's complaint
. In addition, a ruling handed down last month by the U.S. Supreme Court
allows a class action suit against Apple to proceed. The plaintiffs claim that Apple's 30% cut of app revenue forces users to pay more for apps. And Amazon is accused of charging third-party sellers to advertise on its website to compete against first-party sellers and private label sales made by Amazon itself.
Legal experts say that government regulators most likely will refrain from trying to break up these large behemoths due to antitrust violations. Still, the U.S. has used these laws in the past to splinter AT&T into a number of smaller regional phone companies, and in 1911 Standard Oil was forced to break up into a number of smaller oil companies.