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- Apr 10, 2010
The Department of Justice (DOJ) on Tuesday announced it is opening a review into whether the United States’ biggest and most powerful technology companies have stifled competition or hurt consumers.
The federal agency’s antitrust division said in a statement that the sweeping inquiry will evaluate “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.”
Further, the DOJ stated it will “consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online.Amazon is one of the world’s largest online retailer, while Facebook has dominated the social media space over for a decade. For years, Google has operated the most popular search engine and dominated online advertising, a duopoly that Amazon is just now gaining a foothold against.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Makan Delrahim, the Assistant Attorney General of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”
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.Technology giants such as Amazon and Facebook have not commented on the development.
The DOJ’s announcement comes on the heels of a Washington Post report stating that the FTC will allege that Facebook misled users about its privacy practices as part of an expected settlement.
The federal business watchdog will reportedly find that Facebook deceived users about how it handled phone numbers it asked for as part of a security feature and provided insufficient information about how to turn off a facial recognition tool for photos.
Advertisers were reportedly able to target users who provided their phone number as part of a two-factor authentication security feature.
The FTC didn’t respond immediately to a request for comment. Facebook had no comment.
The complaints will reportedly be detailed in a settlement on Wednesday. Facebook will not be required to admit guilt but will have to submit to federal oversight, the newspaper reported.