US Justice Department launches antitrust review of tech giants
Written on the 24 July 2019 by David Simmons
Tech giants like Google, Facebook, Amazon and Apple are staring down the barrel of a US Department of Justice (DOJ) review into whether they are breaching antitrust laws.
The DOJ announced its review into the tech giants overnight, with the focus of the review to look into whether and how market leading online platforms have achieved market power and are engaging in practise that have reduced competition, stifled innovation, or otherwise harmed consumers.
The review will consider the effect tech giants have had on social media and retail services online.
"Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands," says Assistant Attorney General Makan Delrahim of the Antitrust Division at DOJ.
The Department's antitrust review will explore these important issues."
The DOJ's review is the latest move from US officials in what is becoming a Washington D.C. vs Silicon Valley showdown.
It follows significant criticism levelled at social media giant Facebook, YouTube and Twitter following the 2016 Presidential election, during which it was alleged that Russian operatives used the platforms to spread misinformation in an attempt to sway the general public.
Facebook CEO Mark Zuckerberg, Twitter CEO Jack Dorsey and Google CEO Sundar Pichai have all recently appeared on Capitol Hill to testify before congress about privacy, the 2016 election and censorship.
The US Federal Trade Commission (FTC) is expected to slap Facebook with a $5 billion fine soon after it failed to protect user data from Cambridge Analytica; a group that used Facebook user data to target individuals for the Trump 2016 Presidential campaign. The fine will mark the largest civil penalty ever paid to the FTC.
As reported by Reuters, as part of the settlement, Facebook will agree to create a board committee on privacy and will agree to new executive certifications that users' privacy is being properly protected.
Google recently appeared before the US congress during which its director of economic policy Adam Cohen said that the company had actually created competition.
"New competitive pressures often lead to concerns from rivals. We have consistently shown how our business is designed and operated to benefit our customers," said Cohen.
In Australia the Australian Competition and Consumer Commission (ACCC) has been investigating how Facebook and Google dominate digital advertising.
The watchdog released its preliminary report into the tech giants in December last year, containing 11 preliminary recommendations and eight areas for further analysis as part of its inquiry.
The recommendations and condemnations revolved around the uncontrolled disturbance Facebook and Google have had on news organisations, with the ACCC blaming the companies for effectively slashing the revenue generated by local Australian publications.
The report also outlined concerns regarding the extent to which consumers' data is collected and used to enable targeted advertising.
The ACCC made preliminary recommendations aiming to address Google and Facebook's market power and promote increased consumer choice, including a proposal that would prevent Google's internet browser (Chrome) being installed as a default browser on mobile devices, computers and tables and Google's search engine being installed as a default search engine on internet browsers.
The watchdog also proposed that a new or existing regulatory authority be given the task of investigating, monitoring and reporting on how large digital platforms rank and display advertisements and news content. Other preliminary recommendations suggested ways to strengthen merger laws.
The watchdog's preliminary report comes after a significant crackdown on Facebook for failing to address a number of scam advertisements appearing constantly on its platform.
At the time, the ACCC warned Australians about scam ads which appeared on Facebook, as well as trusted news sites and content providers like Google, the SBS, The Daily Telegraph, The Australian, and The Sydney Morning Herald.
Both Google and Facebook claim to have taken action in the past against malicious third-party advertisers.
Business News Australia
Author: David Simmons