Google, Apple, Amazon, and Facebook are feeling the heat as U.S. officials start aggressively investigating whether the companies violated antitrust laws.
The Department of Justice and the Federal Trade Commission have reportedly agreed to start inquires into whether the companies stifled competition and limited consumer choice, according to the Wall Street Journal. The DOJ will examine Google and Apple while the FTC will oversee probes into Facebook and Amazon, the report said.
Meanwhile, the House Judiciary Committee announced on Monday its own antitrust investigation into the tech giants.
The reviews come as officials face growing pressure over what many politicians and academics call lax antitrust enforcement in recent years. While the federal government has imposed few limits on tech companies, European lawmakers have slapped some of those businesses with big fines.
Critics are increasingly arguing that U.S. officials should also crack down. William Kovacic, a law professor at George Washington University and a former FTC chairman, compared the growing outcry to a house fire.
“The house is burning down here, and you guys are watering the rose bushes in the backyard,” he said, voicing critics’ concerns. “Put out the fire.”
But the big questions are: What can regulators really do under U.S. law and will it be enough? The challenge is working under antitrust rules that are much “less aggressive” than those in Europe, said Stephen Calkins, Wayne State University Law School professor who formerly served as the FTC’s general counsel.
On top of that, the DOJ typically takes a “more conservative view” when it comes to antitrust issues, he added. That means it’s less willing to intervene.
In 2013, the FTC closed an antitrust investigation of Google over whether it favored certain search results, among other things. In speaking about the resulting settlement, the FTC said its hands were partially tied.
“Google took aggressive actions to gain advantage over rival search providers,” the FTC said before suggesting that there was insufficient proof that Google broke the law. The evidence, it said, “did not demonstrate that Google’s actions in this area stifled competition.”
Douglas Melamed, a Stanford University law professor who was previously acting assistant attorney general for the DOJ, called the 2013 statement by the FTC “disappointing” because he favored stronger action. But antitrust cases tend to be a “wonky-ish world,” he said, given the difficult burden of proving that questionable corporate behavior is solely for anti-competitive reasons.
Since the FTC let Google off the hook, officials will likely be tougher this time around, experts said. And despite an “unfavorable” legal environment for regulators, they may feel more emboldened to go after the companies even if the chances of success are low.
Experts say there is a growing outcry for swift action. But normally a federal antitrust investigation would take at least a year.
Taking into account court proceedings or settlement negotiations, any final resolution would likely come after the 2020 U.S. presidential election, experts agreed. So the political calculations of a prosecution could change depending on which political party is in power at the time along with any pre-emptive action by the companies to pour water on fire.
If a judge does impose penalties on the tech giants, those punishments could include a small fine all the way up to requirements that the companies change their business practices, divest pieces of their businesses, and pay massive fines. But Melamed, at least, says a worst-case scenario for the companies is unlikely.
“It’s very unlikely that any case we’re going to see growing out the investigations is going to threaten the breakup of these platforms in any fundamental way,” he said. “I don’t think anyone is going to be able to prove the success of these platforms is a threat to any competition.”