Antitrust

The major players of tech and social media have grown so big and powerful, their actions are receiving more scrutiny than ever. In 2020, Alphabet (owner of Google and YouTube), Facebook (owner of Instagram, WhatsApp and Giphy), Amazon and Apple were all under antitrust investigation by various state or federal initiatives. Some also faced investigations or fines from Europe.

Federal antitrust laws define and police anti-competitive behaviors including mergers and acquisitions, monopolies, conspiracies to monopolize or price fix, and unfair or deceptive practices. These laws are enforced by the Federal Trade Commission and the Dept. of Justice (DOJ). The two agencies have the power to fine companies for bad behavior, rollback mergers and even require a company to sell off parts (breaking it up). The FTC and DOJ came to an agreement in 2019 to divvy up scrutiny of Big Tech.

Google became the third tech company valued at more than $1 trillion in early 2020. But it’s dominance in search, email and huge market share of online advertising have made it a target of multiple antitrust investigations. The company faces separate investigations by state attorneys general, the House Judiciary Committee and the DOJ. The DOJ’s investigation began in August 2019, and was expected to end with a lawsuit against Google by the end of summer (2020).

It was also fined $1.7 billion by the European Commission in 2019 over “abusive practices” in online advertising. The Commission said Google broke European Union antitrust rules and blocked rivals from working with companies it was working with in prior years. That was its third multi-billion dollar fine by European regulators.

When the DOJ planned to open an antitrust probe of Facebook in 2019, it became the fourth investigation into possible anti-competitive practices by the social media giant, including one by the FTC and another by several state attorneys general.

Although smaller competitors and some Democratic and Republican politicians are clamoring for antitrust intervention, the difficulty facing all antitrust investigations will be proving harm. As the Wall Street Journal editorial board noted, since the 1970s, antitrust law has “focused not on [company] size but consumer harm.”

“The burden is on the critics of Big Tech to prove genuine damage, and then propose solutions that don’t do more harm than good,” the board added.

  • Business Insider reported in August 2020, that the FTC, New York and California were collaborating on a probe of Amazon. Third-party sellers allege Amazon used data it collects about sellers to develop competing products. Asked about that before Congress, CEO Jeff Bezos said, “We have a policy against using seller-specific data to aid our private label business, but I can't guarantee you that that policy has never been violated.” The EU was expected to file charges against Amazon over the third-party seller allegations.
  • The DOJ, along with some state attorneys general, started taking steps toward an antitrust probe of Apple in early 2020.
  • Apple is involved in an ongoing tax probe that began in 2017 as well as two antitrust investigations launched in 2020 by the European Commission. The antitrust probes are focused on the company’s control of its App Store and payment platform Apple Pay.
  • In February 2020, the FTC asked Amazon, Apple, Facebook, Microsoft and Alphabet to report any unreported business acquisitions to see if any were meant to head off “a competitive threat” or effectively created a monopoly.
  • Speaking about a new DOJ investigation into Google launched in 2019, U.S. Attorney General William Barr said, “I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers ... You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”
  • The House Judiciary Committee’s antitrust subcommittee is investigating Facebook.
  • At least 47 states are investigating Facebook’s ad pricing practices. Even more states (48) launched a similar investigation of Google’s online ad dominance in 2019.
  • The FTC concluded in 2012 that Google used anti-competitive practices and abused its power in online search and advertising. However, it ended the investigation in 2013 after Google volunteered to make changes.

Contact the FTC: (202) 326-3300, antitrust@ftc.gov, Facebook, Twitter, or by mail 600 Pennsylvania Avenue, NW, Washington, DC 20580