States to Launch Antitrust Probe Into Big Tech: Reports

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August 20, 2019

A coalition of states is launching an antitrust investigation into major U.S. tech companies, according to multiple reports.

The reported probe involves a bipartisan group of attorneys general from across the country and could be formally opened as early as next month. As many as 20 states could participate, according to The Wall Street Journal, which first reported the story on Monday.

At a tech conference in Colorado on Tuesday, Makan Delrahim, assistant attorney general at the Department of Justice Antitrust Division, confirmed the forthcoming state investigation, Reuters reported.

A Justice Department spokesperson, however, declined to comment in response to an inquiry from Cheddar.

A state-level investigation — expected to include Apple, Facebook, Google, Amazon, and others — would add a significant new level of scrutiny into big tech, which has increasingly come under pressure from federal regulators in recent years.

Just last month, the Justice Department announced that its antitrust division is opening a review of practices conducted by top digital platforms to secure immense market power. The division will investigate “practices that have reduced competition, stifled innovation, or otherwise harmed consumers,” the agency said.

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Delrahim said in a statement in July.

In February, the Federal Trade Commission announced that it had created a task force dedicated to monitoring antitrust violation in the U.S. tech sector and “taking enforcement actions when warranted.”

The Journal reported Monday that several state attorneys general met with top Justice Department officials, including Attorney General William Barr, in Washington recently to discuss their inquiry into the tech giants. In a statement to Cheddar, the office of Texas Attorney General Ken Paxton confirmed that the meeting with Barr did occur, and that the officials discussed "the real concerns consumers across the country have with big tech companies stifling competition on the internet."

Cheddar reached out to several other prominent attorneys general offices for comment on the probe but did not receive immediate responses.

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Google Director of Economic Policy Adam Cohen, left, testifies alongside Facebook Head of Global Policy Development Matt Perault, second from left, during a House Judiciary subcommittee hearing on Capitol Hill in July. Photo Credit: Patrick Semansky/AP/Shutterstock

During recent public hearings on Capitol Hill, lawmakers have pressed tech companies on potential antitrust violation within their business models.

“There is growing evidence that a handful of corporations have come to capture an outsized share of online commerce and communications,” Rep. Jerrold Nadler, who chairs the House Judiciary Committee, said during the hearing with top tech executives in July. “By virtue of controlling essential infrastructure, these companies appear to have the ability to control access to markets.”

The hearing last month included testimony from representatives of Google ($GOOGL), Facebook ($FB), Amazon ($AMZN), and Apple ($AAPL) — all of which strongly argued that their products and services facilitate competition and business growth in the U.S. economy.

“We have helped reduce prices and expand choice for consumers and merchants in the U.S. and around the world,” said Adam Cohen, Google’s director of economic policy, adding that “firms that once operated in a local or regional market now reach national and international customers.”

Matt Perault, Facebook’s head of global policy development, stressed that the social media platform “faces intense competition” despite its assumed dominance over the digital ecosystem.

Scrutiny on major tech companies solidifying monopoly power has also intensified on the 2020 campaign trail for Democratic Party candidates, with Massachusetts Sen. Elizabeth Warren being one of the earliest — and loudest — voices on the issue.

“Today’s big tech companies have too much power — too much power over our economy, our society, and our democracy,” Warren wrote in a March blog post. “They’ve bulldozed competition, used our private information for profit, and tilted the playing field against everyone else.”

Vermont Sen. Bernie Sanders, New York Sen. Kirsten Gillibrand, and Minnesota Sen. Amy Klobuchar, among others, have also expressed support for breaking up to large tech companies.