Tech companies under investigation over concerns of illegally hurting competition: What it means for Facebook, Google and Amazon

U.S. Department of Justice opened a sweeping antitrust investigation of major techlogy companies and wher ir online platforms have hurt competition, suppressed invation or orwise harmed consumers.

It said probe will take into account “widespread concerns” about social media, search engines and online retail services. Its antitrust division is seeking information from public, including those in tech industry.

“Without discipline of meaningful market-based competition, digital platforms may act in ways that are t responsive to consumer demands,” Makan Delrahim, department’s chief antitrust officer, said in a statement. “ Department’s antitrust review will explore se important issues.”

terse but momentous anuncement follows months of concern in Congress and elsewhere over sway of firms like Google, Facebook and Amazon. Lawmakers and Democratic presidential candidates have called for stricter regulation or even breakups of big tech companies , which have drawn intense scrutiny following a series of scandals that compromised users’ privacy.

Facebook may soon face a significant judgment from Federal Trade Commission over its privacy practices, one that will reportedly include a $5 billion fine and impose or limits on its operations. FTC also reportedly plans to hand Google a multimillion dollar fine over its handling of children’s information on YouTube. Europe has investigated and fined several major tech companies over past several years.

“It seems like nation’s law enforcement ncies are finally waking up to threat posed by big tech,” said Stacy Mitchell of Institute for Local Self-Reliance, which has criticized Amazon for stifling independent businesses. Mitchell testified at a House hearing last week.

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President Donald Trump also has repeatedly criticized big tech companies by name in recent months. He frequently asserts, without evidence, that y are biased against him and conservatives in general.

But Big Tech could also present a difficult target, as current interpretations of antitrust law don’t obviously apply to companies offering inexpensive goods or free online services. Justice Department did t name specific companies in its anuncement.

Justice investigation mirrors a bipartisan probe of Big Tech undertaken by House Judiciary subcommittee on antitrust. Its chairman, Rep. David Cicilline, a Rhode Island Democrat, has sharply criticized conduct of Silicon Valley giants and said legislative or regulatory changes may be needed. He has called breaking up companies a last resort.

Major tech companies already facing that congressional scrutiny declined to comment on Justice Department’s probe. Amazon and Facebook had comment. Apple and Google referred inquiries to public statements by ir executives.

Shares of Facebook, Amazon and Apple were down slightly in after-hours trading.

Traditional antitrust law focuses on dominant businesses that harm consumers, typically defined as price-gouging and similar behaviors. But many tech companies offer free products that are paid for by a largely invisible trade in personal data gleaned from those services. Ors like Amazon offer consistently low prices on a wide array of merchandise.

“That is going to be a tough one for (regulators) to prove,” said University of Pennsylvania law professor Herbert Hovenkamp.

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Beyond that, companies could face scrutiny for buying up smaller rivals that might be a threat to ir business. Last week, Cicilline accused industry giants of creating a “startup kill zone” to insulate m from competition.

For instance, Google bought YouTube in 2006 when it was still a fledging video site struggling to survive an onslaught of copyright infringement lawsuits, and acquired techlogy for its w-dominant Android software for smartphones in an even smaller deal. Facebook snapped up Instagram — w fastest-growing part of its business — in its infancy, and Apple bought techlogy powering its ubiquitous Siri assistant.

Trump-era Justice Department has already tried to push bounds of antitrust law, albeit unsuccessfully. government sued to block AT&T’s acquisition of Time Warner, arguing that combined company could hike prices for programming, to consumers’ detriment, but lost case both in lower court and on appeal.

In his January confirmation hearings, Attorney General William Barr ackwledged curiosity about how Silicon Valley giants grew so huge “under se” of antitrust enforcers. “You kw, you can win that place in marketplace without violating antitrust laws,” he said. “But I want to find out more about that dynamic.

Trump has been a fierce critic of AT&T, which owns CNN, in addition to many large tech companies. At various times, he has publicly criticized Google, Facebook, Apple and Amazon for allegedly shady, biased or unpatriotic behaviour.