U.S. Department of Justice Will Review Business Practices of Big Tech

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On Tuesday, July 24, the U.S. Department of Justice (DOJ) announced that its Antitrust Division is reviewing how “market-leading” online platforms have acquired their market power and whether these platforms are engaging in “practices that have reduced competition, stifled innovation, or otherwise harmed consumers.”

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division in a statement. “The Department’s antitrust review will explore these important issues.”

While the DOJ did not release any company names in its press release, the presumption among media outlets is that this review will likely include Amazon, Apple, Facebook, and Google.

That speculation is based, in part, on the fact that those companies were the focus of an antitrust hearing held last week by the U.S. House of Representatives Antitrust Committee, chaired by Rep. David Cicilline (D-RI). The hearing focused on the question of whether Amazon, Apple, Facebook, and Google were abusing their market power. Also last week, the American Booksellers Association wrote the Federal Trade Commission, presenting to the federal regulatory body a comprehensive, 21-page argument as to why it should investigate Amazon for violations of Sections I and II of the Sherman Act. ABA plans to reach out to the DOJ with information as well.

The DOJ review could indicate a significant change in the department’s stance in antitrust enforcement, as reported by the New York Times. The article pointed out that since the early 1970s, there had been a consensus in antitrust circles that if a company was focused on consumer welfare, especially in regard to lower prices, it would not attract an antitrust investigation.

Sam Weinstein, a former antitrust official at the Justice Department and a professor at Cardozo Law School, told the Times that it was out of the ordinary for DOJ to announce it was reviewing a company or companies. He noted it could be a sign that DOJ wants to signal that it is responding to concerns about the growing power of Big Tech. “There is a lot of criticism of the agencies that they are not doing enough about big tech and this is a way to respond to that criticism,” Weinsten said.

Under review will be the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online, DOJ noted. Its Antitrust Division is now seeking information from the public, including industry participants “who have direct insight into competition in online platforms, as well as others.”

DOJ noted in its press release that its goal 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.”