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Justice Opens Anti-Trust Inquiry Into Big Tech

Justice Opens Anti-Trust Inquiry Into Big Tech

In a move, that has been long-awaited, the DOJ (Department of Justice) is now opening up a new review of big tech companies to see if they have been involved in monopoly powers, using their position to target competitors and people of differing political views unfairly.

They are looking at the practice of these companies and see if they are using their power to hurt competition, both in the financial and political realm, and if their platforms are set up to cut competition, suppress innovation and hurt consumers.

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

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

The announcement follows months of concern in Congress and elsewhere that firms like Google, Amazon, and Facebook are exerting their influence in a way that is harmful to competitors. Lawmakers from both sides of the political aisle are starting to notice the power these companies hold. The Democrats are more concerned about the monopoly of their position with practices to destroy competitors, the GOP members are more concerned how they are using their power to try to influence the political field, as they are censoring out political thought they deem as unacceptable.

There are calls for stricter regulations and the possible breakup of the big tech companies to reduce their power over consumers and rivals.

Facebook may soon face a significant judgment from the Federal Trade Commission over its privacy practice, one that will reportedly include a $5 billion fine and impose other limits on its operations. The 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 the past several years.

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

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President Trump has repeatedly criticized the big tech companies in recent months; he frequently claims they are biased against him, although it has to be added at this point, no proof definitively points to this as a factual claim, there is much-supporting evidence that shows this would be indeed the case.

One of the problems with big tech is the current interpretation of antitrust law doesn’t apply to companies offering the goods, ideas, and free online service. What is more, the Justice Department did not specify which companies and what violation/ violations they are looking into.

The justice investigation mirrors a bipartisan probe of big tech undertaken by the House Judiciary subcommittee on antitrust. Its chairman, Rep. David Cicilline, a Rhode Island Democrat, has sharply criticized the conduct of Silicon Valley giants and said legislative or regulatory changes might be needed. He has stated breaking up the compnanies is a move of last resort.

None of the major tech companies are willing to give statements concerning this investigation, instead, Amazon and Apple, while not commenting, have along with Google said to inquire from their executives.

Their shares are not taking a significant hit over this, Apple, Amazon, and Facebook see a slight down-tick of their stocks in after-hours trading following this announcement.

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Traditional antitrust law focuses on dominant businesses that harm consumers; typically such a move would be price gouging, low-balling competitors until they go out of business, and other such behaviors.

The problem is that most of these companies are not doing this, instead, are offering free services and receiving personal data from their customers when they access this service. Amazon has provided such low prices that they are driving many of their competitors out of business, but this is not showing a patter of trying to low-ball to try to bankrupt their competitors, it is merely their business plan.

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

The most significant problem could be the practice of these companies to buy out their competitors who they view as a threat to their business, but this is a practice other companies do as well. Last week, Cicilline gave a statement accusing tech giants of creating a “startup kill zone” to insulate them from the competition.

We have seen Google buy out YouTube, Facebook buys out competitors and then folds them into their business, so they are showing a profit, rather than a loss from their competitors, and to acquire their tech to keep themselves with an unfair advantage over competitors. Companies such as Apple and Android have been very much involved in this. Another great example of this is Facebook acquiring Instagram as they started to grow, and purchasing out the tech now used to power Siri.

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In a move that has surprised some supporters, the Trump Justice Department has moved in a very forceful way in this, a great example is their move to stop AT&T from buying out Time Warner, arguing that the companies combined would control a large slice of business and bring back the old price of controlling that Ma Bell used to employ. These cases were overturned by the lower courts and the appeal courts.

Attorney General William Barr acknowledged curiosity about how Silicon Valley giants grew so huge “under the nose” of antitrust enforcers during his confirmation hearings. “You know, you can win that place in the marketplace without violating the 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, an Amazon for allegedly shady, biased or unpatriotic behavior.

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