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The US Justice Department announced yesterday that it will launch an antitrust investigation into the nation’s largest technology companies - including Amazon, Apple, Facebook and Google, though authorities did not name these companies specifically - to see if they are behaving in an anti-competitive fashion.

This new probe joins similar investigations being conducted by the US Congress and the Federal Trade Commission (FTC), not to mention in the European Union.

The New York Times, its analysis, writes that “the action is the clearest sign yet that the longtime arguments that helped shield the tech giants from antitrust scrutiny are eroding. Since the 1970s, a consensus in antitrust circles has been that if companies were focused on consumer welfare — for example, by offering low prices — they were not likely to attract federal intervention. Since companies like Google and Facebook largely provide free services, the thinking went, they were not subject to federal antitrust examination.

“But that approach has evolved, pushed by scholars and others, as concerns about the clout and reach of Google, Facebook, Amazon and Apple have grown … The Justice Department’s review may not lead to full-blown investigations of the companies. But the timing of the announcement ratchets up pressure on the tech giants.”

The Times quotes Attorney General William Barr as saying that “tech companies should stop using advanced encryption and other security measures that effectively turn devices into ‘law-free zones,’ essentially criticizing Apple and its iPhones without naming them.”

None of the big tech companies commented on the Justice department announcement, though Apple did point reporters to a recent CBS News interview with its CEO, Tim Cook, in which he said, “I think we should be scrutinized. But if you look at any kind of measure about ‘is Apple a monopoly or not,’ I don’t think anybody reasonable is going to come to the conclusion that Apple’s a monopoly.”

In its coverage, the Wall Street Journal writes:

“The Justice Department will examine issues including how the most dominant tech firms have grown in size and might—and expanded their reach into additional businesses.

“The Justice Department also is interested in how Big Tech has leveraged the powers that come with having very large networks of users, the department said.

“There is no defined end-goal yet for the Big Tech review other than to understand whether there are antitrust problems that need addressing, but a range of options are on the table, the officials said. The inquiry could eventually lead to more focused investigations of specific company conduct, they said.”

In a related story, Bloomberg reports that Rep. David Cicilline (D-Rhode Island) accused Amazon lawyer Nate Sutton’s recent testimony to a House of Representatives committee that Amazon “doesn’t use data it collects on sales to favor its own products over third-party sellers.”

According to the story, “Cicilline cited a media report in which a former Amazon employee in product management claimed to have pulled ‘sellers’ data to look at what the best products were,’ according to an excerpt in the lawmaker’s letter.”

Bloomberg writes that the lawmaker has written a letter to Amazon asking “questions about Amazon’s relationship with third parties that sell on its platform. Critics of the company have said it can use the data it collects about sales to favor its own products and squelch competition. The letter also asks about Amazon’s share of the online retail market and about its cloud-computing business.”

In other letters, the story says, “Cicilline queried Google on whether its ‘guiding principle’ is to send users off its own sites after they conduct a search as well as an agreement with Apple Inc. for Google to be the default search engine on Apple devices. He asked Facebook about its evaluation of start-ups for acquisitions, among other issues.”
KC's View:
Someone wrote - and I think this is pretty accurate - that the major tech companies have managed to do something almost unimaginable in 2019.

They’ve united Democrats and Republicans.

Yikes. Will wonders ever cease?

It seems clear that big tech is going to be facing a lot of legislative and regulatory challenges in the near future, and there probably will be a number of ways in which they will have to adjust their business models.

On Monday, we had a story and commentary that outlined many of the issues with which Amazon is dealing, including probes into its business practices taking place in Europe.

Well, yesterday MediaPost reported that “Germany agreed to drop a seven-month investigation into Amazon's merchant terms and conditions after the marketplace said it would amend its Business Services Agreement. The company plans to make the changes worldwide.

“The new terms will take effect in August. This means Amazon will comply with Europe's liability toward business partners on its European platforms, giving merchants 30-day notice and an explanation before removing a seller from the platform.”

Compliance. Willingness to adjust and change. Discretion, in fact, may end up yet again being the better part of valor.