US to open antitrust review of big tech firms

The United States Justice Department said on Tuesday that it was opening a large-scale antitrust investigation of big US tech firms.

The probe will look into “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers,” a Justice Department statement read.

It did not refer to any specific companies, but the Justice Department said the review would consider concerns raised about “search, social media, and some retail services online” — an apparent reference to Google’s parent company Alphabet, Amazon, Facebook and Apple.

The action is the clearest sign yet that the longtime arguments that helped shield the tech giants from antitrust scrutiny are eroding.

Since the 1970s, a consensus in antitrust circles has been that if companies were focused on consumer welfare — for example, by offering low prices — they were not likely to attract federal intervention. Since companies like Google and Facebook largely provide free services, the thinking went, they were not subject to federal antitrust examination.

Via The Wall Street Journal/The New York Times