There is no denying that technology dominates the world we live in, and among those who are the front-runners of the technological movement are the large tech companies from the USA, such as Facebook, Google, Amazon, and Microsoft.
These few companies probably own or are part of the development of the majority of the available technologies in the world right; that’s why the U.S. Department of Justice has launched an investigative inquiry on how these corporations conduct their business and the impact that these massive tech companies have in the sphere of innovation.
On Tuesday, the Justice Department said that it would launch an anti-trust review against tech companies to fully understand how these companies are accumulating market power and to determine whether they have moved to reduce competition, in one point or another.
The action was brought by the fact that state actors have already changed their perspective on these huge companies, finally breaking down the shields that protect them from anti-trust investigations. The rule of thumb before was that when a company operates for consumer welfare, they are less likely to be investigated. And since Facebook, for example, is a free service, this understanding has effectively covered the company from scrutiny from anti-trust regulators.
But that has changed now. State actors, as pushed by scholars and anti-trust advocates alike, have already shifted the tides against Facebook, Google, Microsoft, Amazon and other huge tech superpowers with the Justice Department tailing their developments.
Reportedly, officials from the Justice Department have been conducting meetings with tech industry experts to understand the situation, learn about the potential harms from these conglomerates, and to help them device a plan to regulate the continuous, more often unregulated, growth of these tech companies.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Makan Delrahim, head of the Justice Department’s antitrust division, said in a statement. “The department’s antitrust review will explore these important issues.”
As a focus of the anti-trust investigation against the tech above companies, the Justice Department wants to know whether the recent acquisitions made by these companies have effectively eaten up competition and how these acquisitions have impacted innovation.
Ahead of the scheduled hearing, Facebook has earlier defended its acquisition of the photo-sharing app, Instagram, and the popular instant-messaging platform, WhatsApp. In a prepared statement by Matt Perault, Facebook’s director of public policy, he said that the acquisition was the reason why the two platforms were thriving right now and denied that the move thwarted innovation.
“Instagram and WhatsApp have had more opportunity to innovate as part of Facebook than they would have on their own — enhancing users’ experience and resulting in more choice for more people overall, not less,” Perault said in his prepared statement.
“Like most major American companies, Facebook’s acquisitions have played an important role in fueling innovation — both for our products and services and for the startup community,” Perault added.
Furthermore, Perault further said that acquisitions like this are what empowers innovation by “bringing together parties’ complementary strengths.”
But this is not the only problem seen by the Justice Department. On Tuesday, Attorney General William P. Barr has accused tech companies in using the powers of technology to bypass the law. He is referring to how tech companies are using advanced encryption and other security measures that effectively turn devices into “law-free zones.”
Without naming Apple, the AG is referring to phone encryption capabilities of iPhones, which the US government has been trying to crack only for apple to develop another one.
In announcing the review, the Justice Department did not name specific companies who will be the target of the anti-trust investigations. They, however, said that they would look into concerns about search, social media, and some retail services. Facebook has already confirmed through the prepared testimony they released last week that they are part of the investigation, and others are presumable Google, Apple, and Amazon.
In an interview, Apple’s Timothy D. Cook expressed his agreeance that tech companies should be “scrutinized,” and proceeded to clarify that Apple is not a monopoly.
“But if you look at any kind of measure about ‘is Apple a monopoly or not,’ I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly.”
The Justice Department refused to comment more than their announcement.