Given bi-partisan concerns over the market power of these major digital technology companies, which include Google, Amazon, Facebook and Apple, their potential downsizing is very much a possibility.
In a significant development that marks the latest sign of the Trump government stepping up is scrutiny over big tech firms, the U.S. Justice Department disclosed that it was opening a broad investigation into the dealings of all major digital tech firms.
The probe will look into various aspects, including whether they engaged in anti-competitive practices.
In a statement, the Justice Department stated, 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”.
Incidentally, the Justice Department did not specify the companies that are being probed but hinted at them saying, the probe would include “search, social media, and some retail services online” in what is likely to be a reference to Alphabet Inc, Amazon.com Inc and Facebook Inc, and potentially even Apple Inc.
A spokesman for the Justice Department declined to provide a list of companies that would be scrutinized.
Apple and Google declined to comment.
Facebook and Amazon did not immediately respond to requests for comment.
With the news reaching the market, Facebook’s shares fell by 1.7% in after-hours trading on Tuesday, Alphabet’s shares were down by 1%, Amazon’s was down 1.2% while Apple’s was lower by 0.4%.
As per Senator Richard Blumenthal, a Democrat, the Justice Department “must now be bold and fearless in stopping Big Tech’s misuse of its monopolistic power. Too long absent and apathetic, enforcers now must prevent privacy abuse, anti-competitive tactics, innovation roadblocks, and other hallmarks of excessive market power.”
According to a source briefed on the matter, the review may include state attorney generals.
In a statement, 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.”
Last week, the House Judiciary Committee’s antitrust panel quizzed executives from the four firms on their competitive practices while noting that Google, Facebook, Amazon had a rising share of key markets.
“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.
Senator Marsha Blackburn, a Republican, has praised the investigation saying a Senate tech task force she chairs would be looking at how to “foster free markets and competition.”