Facebook, Google, Amazon to face new antitrust taskforce

The US is creating a new taskforce to examine potential antitrust violations by the likes of Google, Facebook and Amazon.

Facebook CEO Mark Zuckerberg testifying before a joint hearing of the US Senate in 2018. Picture: AFP

The US Federal Trade Commission will create a new taskforce to examine potential antitrust violations in the tech industry, signalling tougher scrutiny ahead for the sector’s largest firms.

The new FTC scrutiny will be broad, officials said, and will include re-examining mergers that already have been approved by the government. That re-examination could eventually lead the FTC to try to unwind deals that it finds to be having anti-competitive effects now, officials said.

“The role of technology in the economy and in our lives grows more important every day,” FTC Chairman Joe Simons said in a statement. “It makes sense for us to closely examine technology markets to ensure consumers benefit from free and fair competition.” The FTC action reflects growing concern in Washington and around the country that some US tech companies have grown so large and powerful that they have begun to squelch competition in various ways and harm consumers.

The move raises the stakes in particular for giant firms such as Facebook and Alphabet, which includes Google and YouTube.

Both have grown in part through large mergers over the past decade or so that the government initially chose not to block; Facebook by acquiring companies such as Instagram and WhatsApp, Alphabet through Google’s acquisitions of DoubleClick and AdMob.

The FTC move comes as some consumer advocates have been urging a breakup of Facebook as the FTC weighs penalties over its privacy missteps.

Those include political data firm Cambridge Analytica’s accessing of Facebook users’ data. FTC staff have discussed fines of as much as $US5 billion in the agency’s investigation of the company, the Journal has reported.

A person following the discussions, however, said the two sides appear to be far apart in negotiations over a new consent decree, and a resolution could be weeks or months away.

Facebook and Google declined to comment.

Brick-and-mortar retailers that have struggled to keep pace with Amazon.com and other online shopping sites also cheered the news. “Retailers support the creation of a new task force … to bring needed scrutiny to the relatively few technology platforms that control a growing share of modern commerce,” said Nicholas Ahrens, vice president of innovation for the Retail Industry Leaders Association, a trade group that includes many big-box chains.

The new task force will be drawn from existing staff, and include 17 FTC attorneys. While FTC officials said they couldn’t discuss specific cases they would be examining, they said they would consider breaking up deals that are creating harms.

“In general with consummated mergers we have the full panoply of remedies,” said Bruce Hoffman, the director of the FTC’s competition bureau. That could include breaking up merged firms or requiring a spin-off of specific units, he added, assuming the FTC can meet its legal burden of showing harm.

Politicians and experts across the political spectrum increasingly have suggested that US antitrust laws and enforcement practices have failed to keep pace with the furious growth of some dominant internet companies. In large part that’s because it has often been hard to show how consumers have been directly harmed through price increases, for example.

“The FTC, if it is to remain relevant, needs some way of assessing the evident competition problems in the tech sector and taking action when necessary,” said Tim Wu, a Columbia University law professor who has written a book, The Curse of Bigness, about antitrust in the hi-tech era. “The FTC needs to get past its laser-focus on consumer prices, and figure out what competitive harm means in today’s tech markets.” In contrast, the European Union has slapped Alphabet with billions in fines for alleged antitrust violations, such as abusing the dominance of its ubiquitous Android mobile platform.

Some tech industry advocates caution against rewriting antitrust rules to make it easier to go after giant tech firms in the US, however, warning that tightening the rules could kill the hi-tech golden goose.

“Given the increasing “techlash, especially from the anti-monopoly left that sees large firms of any kind as suspect, it is not surprising that the FTC took this step today,” said Robert Atkinson, president of the Information Technology and Innovation Foundation, a think tank. He added that he hopes the FTC “will not be swayed by populist furore and will instead confine itself to careful, objective analysis, based on the reality that many technology markets tend toward concentration and that this concentration is usually pro-consumer and pro-innovation.”

Dow Jones Newswires