Antitrust probes of Amazon, Google could force industry shift even without legal action
The Trump administration’s heightened antitrust scrutiny of Amazon and Google could have a wide-reaching impact on the sector even if charges are not brought against two of the largest U.S. technology firms, former government officials, industry experts and attorneys tell FOX Business.
Shares of both companies were down in Wall Street trading on Monday on the news of the potential for federal probes.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GOOGL | ALPHABET INC. | 154.09 | -1.92 | -1.23% |
| AMZN | AMAZON.COM INC. | 174.63 | -4.59 | -2.56% |
Among the business sectors the government would likely investigate is Google’s advertising and search engine operations, as well as whether Amazon has taken steps to block third-party competitors from its online marketplace.
Attorneys caution, however, that any review is likely in the nascent stages and the launch of a probe does not mean the Department of Justice or the Federal Trade Commission will end up pursuing charges.
Still, the news is likely to spur competitors to independently analyze their own operations and potentially change future plans.
“You can still have a good result by opening an investigation,” said Andrew Barlow, a former DOJ antitrust attorney and current partner at law firm Doyle, Barlow & Mazard. “If there are any business practices that are questionable, there may be some changes.”
Any companies that have significant market share in Silicon Valley are “asking antitrust lawyers a lot of questions about their activities,” says Chris Sagers, a professor with Cleveland-Marshall College of Law.
“Any kind of conduct they engage in, even introducing new products or the way they design those products, if those things could have the effect of keeping somebody else out of some product space that at least raises the possibility of antitrust liability,” he told FOX Business.
The potential reviews of Amazon and Google come as largely no surprise, particularly after the FTC announced earlier this year it would launch a task force to examine competition in the tech industry, including analysis of both prospective and consummated mergers.
Unlike other industries, experts say technology companies are ripe for such antitrust investigations, given the multi-faceted aspects of their businesses and the economics of the sector that pave the way for dominant firms.
The political pressure is also mounting. In the past year, top lawmakers including House Minority Leader Kevin McCarthy, R-Calif., and Sen. Elizabeth Warren of Massachusetts, who is running to be the Democratic nominee for president in 2020, have intensified their public criticism of Amazon, Facebook and others for growing too powerful.
“Big tech firms are in the crosshairs, both politically and in terms of government agencies,” said John Lopatka, a former FTC official and current professor at Pennsylvania State University. “You make a lot of friends, you won’t make any enemies by pursuing an investigation over firms like [Amazon and Google], as well as Facebook.”
It’s been nearly a decade, however, since the federal government pursued legal action over a company’s alleged monopolistic behavior, claims the DOJ and FTC have had mixed results in successfully proving.
In 1998, the DOJ filed an antitrust suit against Microsoft, a now-famous case that resulted in a victory for the federal government and forced the tech firm to institute a number of remedies, including the appointment of a panel three individuals to monitor compliance.
Around the same time, the Justice Department lost a separate antitrust case in which the government alleged that American Airlines used predatory pricing to prevent competition at the Dallas/Fort Worth International Airport.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MSFT | MICROSOFT CORP. | 399.12 | -5.15 | -1.27% |
| AAL | AMERICAN AIRLINES GROUP INC. | 14.11 | +0.09 | +0.64% |
The FTC also previously investigated Google for potential antitrust activity but closed without any legal action. To resolve concerns from the agency, the Mountain View, California-based company agreed in 2013 to provide patents on its key technology to competitors and provide more flexibility to online advertisers.
The prior review does not prevent the federal government from pursuing any additional charges, attorneys say. But one potential complication is Trump’s past comments on the matter, including suggesting an antitrust probe was necessary after complaining about potential bias against conservatives on the platforms.
AT&T tried to use Trump’s comments that its deal to acquire Time Warner was “not good for the country” to get a DOJ lawsuit seeking to block the merger tossed out in court.
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Now, legal experts say the administration could run into a similar roadblock if the government were to pursue legal action. Trump previously said he was considering directing the DOJ to examine whether Google’s business practices violate antitrust law.
"That doesn't mean we're doing it, but we're certainly looking at it," Trump said last year. "I think most people surmised that."
