Antitrust mania sweeps Washington as Google, Facebook, Amazon and Apple all face probes

Antitrust mania sweeps Washington as Google, Facebook, Amazon and Apple all face probes


The Trump administration and many Republicans in Congress believe that Silicon Valley is biased against conservatives. Democrats are angry about privacy issues, the 2016 election and the perceived arrogance of technology executives in the face of their criticisms. Other critics of “big tech” believe that there’s too much power concentrated in too few companies.

In Europe, major U.S. tech companies have been on the receiving end of antitrust probes and penalties for several years, putting pressure on U.S. regulators to take action. Add to the changes in public perceptions of these companies, and you get what we have today: a tsunami of impending investigations from the U.S. Department of Justice, Federal Trade Commission and Congress.

Despite what seems like a consequential set of developments, it’s important to remember that there’s a major difference between investigations, hearings and any real-world outcomes that could result.

What’s been announced or leaked. The Wall Street Journal, Bloomberg and Reuters broke news over the past several days about potential investigations of Google, Facebook, Amazon and Apple. Reportedly, according to an agreement between agencies, the FTC will have jurisdiction over Amazon and Facebook; the DOJ will pursue Google and Apple. What’s striking is that all these major companies are being pursued at once, as though it’s by design.

The House Judiciary Committee will also be examining issues of competition and market power, according to a statement released by the committee. Chairman Jerry Nadler said, “Given the growing tide of concentration and consolidation across our economy, it is vital that we investigate the current state of competition in digital markets and the health of the antitrust laws.” The Committee will reportedly be looking at several issues:

  • Whether and where competition is lacking in digital markets
  • Whether large companies are suppressing competition
  • Whether Congress and regulators need to do more “to address Big Tech’s dominance”

Microsoft untouched. It’s also noteworthy that in all the antitrust mania Microsoft is conspicuously absent. That’s partly because Microsoft has been through this once before. In addition, Microsoft is also less powerful and less dominant than it once was — something those who oppose government intervention in markets point at to argue against regulation (“the market and competition will take care of itself”).

However it’s also the case that Microsoft has set itself apart from some of the others under scrutiny by the actions and statements of CEO Satya Nadella. He’s positioned Microsoft as the most thoughtfully ethical of the big tech companies (Tim Cook might dispute that). It’s also the case that Microsoft doesn’t dominate any single market sector the way it used to with operating systems or browsers.

I suspect at some point, however, Microsoft will become involved at the margins or contribute its feedback to investigators about where and how the market should be regulated. Everyone will agree that there should be some regulation; disagreement will come in the form of its precise form and scope.

Outcomes may be years away. It’s appropriate for Congress and regulators to revisit antitrust rules in the face of a new tech-driven economy. But it should be a dispassionate analysis that considers market competition, consumer well-being and the economy as a whole, rather than driven by resentments and election-year politics. But that’s Washington.

What happened with Microsoft is instructive and potentially predictive of the future. The company was determined to be a monopoly in April of 2000 and directed to be split into two halves. That never happened, and today the business is doing just fine as one of the most valuable U.S. companies by market capitalization.

While there’s public support for more technology regulation, there’s less support to split up big tech companies. And it’s unlikely that we’re going to see the breakup of any of them. The investigations will be formalized and intensify next year in the run up to the election and beyond. But any regulatory decisions can be challenged in court, as Google has done with antitrust fines in Europe.

So we’re likely years away from any actual outcomes. Still, there will probably be changes that come from these investigations, potentially in the form of settlements to preempt litigation. But for the foreseeable future, we can expect business as usual.


About The Author

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.



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