A new deal between the Department of Justice and the Federal Trade Commission will see U.S. regulators divide and conquer as they expand their oversight of Apple, Alphabet, Amazon and Facebook, according to multiple reports.
New details have emerged of an agreement between the two U.S. regulators that would see the Federal Trade Commission take the reins in antitrust investigations of Amazon and Facebook, while the Department of Justice will oversee investigations of Alphabet’s Google business and Apple.
Shares of Apple’s stock tumbled on news of the Justice Department’s role in overseeing the company, which was first reported by Reuters even as the company was in the middle of its developer conference celebrating all things Apple.
Google has been here before. Eight years ago, the Federal Trade Commission began an investigation into Google for antitrust violations, ultimately determining that the company had not violated any antitrust or anti-competitive statutes in its display of search results.
On Friday, The Washington Post reported that the Justice Department was initiating a federal antitrust investigation into Google’s business practices, according to multiple sources.
That report was followed by additional reporting from The Wall Street Journal indicating that Facebook would be investigated by the Federal Trade Commission.
The last time that technology companies faced this kind of scrutiny was Google’s antitrust investigation, or the now twenty-one year old lawsuit brought by the Justice Department and multiple states against Microsoft.
But times have changed since Google had its hearing before a much friendlier audience of regulators under President Barack Obama.
These days, Republican and Democratic lawmakers are both making the case that big technology companies hold too much power in American political and economic life.
Issues around personal privacy, economic consolidation, misinformation and free speech are on the minds of both Republican and Democratic lawmakers. Candidates vying for the Democratic nomination in next years Presidential election have made investigations into the breakup of big technology companies central components of their policy platforms.
Meanwhile, Republican lawmakers and agencies began stepping up their rhetoric and planning for how to oversee these companies beginning last September, when the Justice Department brought a group of the nation’s top prosecutors together to discuss technology companies’ growing power.
News of the increasing government activity sent technology stocks plummeting. Amazon shares were down $96 per-share to $1,680.05 — an over 5% drop on the day. Shares of Alphabet tumbled to $1031.53, a $74.76 decline or 6.76%. Declines at Facebook and Apple were more muted, with Apple falling $2.97, or 1.7%, to $172.32 and Facebook sliding $14.11 (or 7.95%) to $163.36.
In Senate confirmation hearings in January, the new Attorney General William Barr noted that technology companies would face more time under the regulatory microscope during his tenure, according to The Wall Street Journal.
“I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers,” Barr said. “You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”