Tech shares fall as Justice Department reveals it has launched antitrust investigation into Amazon, Google and Facebook over ‘anti-competitive practices’
- Stock in Amazon, Google’s parent company Alphabet and Facebook all fell
- The Justice Department and Federal Trade Commission announced a probe
- Probe will look at whether their online platforms have hurt competition
Shares in the tech giants have fallen dramatically as the US government announced it would be investigating them for anti-competitive practices.
Stock in Amazon, Alphabet and Facebook fell more than 1%, in after hours trading yesterday while shares in Apple and Microsoft Corp., the largest tech company, declined by less than 1%.
On Tuesday it was first reported that the Justice Department and Federal Trade Commission was launching the inquiry that could lead to antitrust charges.
The Justice department later confirmed the investigation.
Shares in Google’s parent company Alphabet plunged along with several other tech giants yesterday
Alphabet shares fell 1 per cent in after hours trading yesterday after news of the investigation broke
‘The Department’s antitrust division is reviewing 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,’ the Justice Department announced.
‘The goal of the Department’s review is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want,’ the announcement concluded.
‘If violations of law are identified, the Department will proceed appropriately to seek redress.’
It comes as a growing number of lawmakers have called for stricter regulation or even breaking up of the big tech companies, which have come under intense scrutiny following a series of scandals that compromised users’ privacy.
President Donald Trump also has relentlessly criticized the big tech companies by name in recent months. He frequently asserts, without evidence, that companies such as Facebook and Google are biased against him and conservative politicians.
The Justice Department did not identify specific companies but said the review would consider concerns raised about ‘search, social media, and some retail services online’ – an apparent reference to Google, Amazon, Facebook and potentially Apple.
The Department of Justice announced the investigation into the tech giants on Tuesday afternoon
The Federal Trade Commission is poised announce the terms of its settlement with Facebook amid allegations that the social media giant mishandled its users’ private information.
According to two people briefed on the matter, Facebook has agreed to pay $5 billion and create a board committee on privacy.
As part of the settlement, Facebook will also agree to new executive certifications that users’ privacy is being properly protected, the sources said.
The Washington Post reported on Tuesday that the FTC will allege Facebook misled users about its handling of their phone numbers and its use of two-factor authentication, citing two people familiar with the matter.
The Post also reported the FTC also plans to allege Facebook provided insufficient information to about 30 million users about a facial recognition tool, an issue identified earlier by Consumer Reports.
Two people briefed on the matter confirmed the Post report the FTC will not require Facebook to admit guilt as part of the settlement.
The settlement will need to be approved by a federal judge and will contain other significant allegations of privacy lapses, the people said.
The fine will mark the largest civil penalty ever paid to the FTC.
The FTC and Facebook declined to comment.
Attorney General William Barr’s Justice Department revealed the antitrust investigation on Tuesday
Source: Read Full Article