DOJ Initiates Antitrust Investigation of Big Tech

Facebook forced to pay $5 billion fine

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The Department of Justice announced Tuesday its plans to investigate "market-leading online platforms" for potential anticompetitive behavior and violations of federal antitrust laws.

The move is just the latest by a White House and GOP establishment that have grown increasingly suspicious of, and even hostile to, Silicon Valley. Recent FEC reports show that the feeling is mutual, with Google, Twitter, and Facebook employees contributing $250,000 to Democratic presidential candidates and zero dollars to President Donald Trump.

DOJ's official announcement was sparse on details, indicating that the investigation would address "widespread concerns" held by "consumers, businesses, and entrepreneurs" about the practices of "search, social media, and some retail services."

"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, who runs the antitrust division. "The Department's antitrust review will explore these important issues."

The department did not specify which firms it was particularly interested in, although it most likely includes the so-called FAANG: Facebook, Apple, Amazon, Netflix, and Google. This comprehensive investigation adds to, and may or may not supersede, the Department's already-existing groundwork for an antitrust investigation into Google specifically.

These firms, which are all ultra-valuable and offer services and goods across a variety of sectors, have collectively faced enormous scrutiny, with experts and the public increasingly questioning whether they have grown too big. Earlier this month, Congressional lawmakers grilled Apple, Facebook, and Google executives, with both Democrats and Republicans calling in to question their responsibility as market actors.

One of the most prominent congressional skeptics of big tech has been Josh Hawley (R., Mo.) an up-and-coming freshman senator who has sought to make a name for himself with a series of bills targeting big tech censorship and what Hawley sees as predatory sales practices. Hawley responded to the news of the new DOJ investigation on Twitter, calling it "very big news and very important."

"In January, AG Barr gave me his commitment that he would take Big Tech antitrust concerns seriously," Hawley added. "Glad to see he's following through."

Representatives of big tech were less than thrilled with the new investigations, however. NetChoice, an industry consortium, voiced its opposition almost immediately following the announcement.

"While anti-tech advocates argue that anything big is bad, for America's small businesses, often the bigger the platform the better," NetChoice VP and general counsel Carl Szabo said. "If the DOJ sticks to the facts, it will see that Americans have more choices and more information than ever. Thanks to innovative online services, consumers have access to an abundance of products, businesses, and information."

The Department of Justice is not the only federal agency focusing on big tech; it has partnered with the Federal Trade Commission to tackle antitrust issues, On Wednesday, the team-up landed its first big fish, securing a $5 billion civil penalty from Facebook, which the departments described as "unprecedented."

According to DOJ, the Facebook settlement is a result of allegations the social media giant mislead users about the extent to which third-party applications could access their personal information, and further deceived them about the use of other information. Facebook has promised to implement "robust new compliance measures," a move the FTC sees as an unambiguous win.

"Despite repeated promises to its millions of worldwide users that they could control how their personal information is shared, Facebook took steps to undermine consumers' choices," FTC chairman Joe Simons said. "The magnitude of the $5 billion penalty and sweeping conduct relief are unprecedented in the history of the FTC. The relief is designed not only to punish previous violations but, more importantly, to change Facebook's entire privacy culture to decrease the likelihood of continued violations."