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The surprise US Department of Justice press release released on Tuesday about its Big Tech investigation was intended to send a signal to many groups, but high-tech companies were not really part of it. .
The announcement was an unusually public performance by a federal regulator that generally favors confidentiality in such cases. Indeed, it was essentially an opinion, especially to a key figure in Congress, indicating that the Ministry of Justice would now conduct antitrust investigations of large technology companies, said David Balto, a lawyer specializing in antitrust legislation in Washington DC. and with the regulators of competition.
For technology companies, the announcement by the GMs was at least a subtle indication that the government may not be as severe as it may seem, he said.
"It's good news for companies," Balto said.
This may seem a bit ironic given the content of the ad. In its statement, the Justice Department said it would examine the market power of "leading online platforms" to determine whether they have thwarted competition or harmed consumers. The agency promised to "seek redress" if it discovered violations, essentially threatening to sue companies.
Read it: The Department of Justice has just opened an extensive investigation to determine if large high-tech companies such as Amazon, Facebook and other entities are illegally harming competition
The announcement was a surprise. Many reports have indicated that the Department of Justice and the Federal Trade Commission are beginning to look at the competitive practices of large technology companies. But the agencies had refused to comment on the recording of these reports. In fact, federal law enforcement agencies rarely recognize ongoing investigations of specific individuals or businesses.
The agency will likely react to political pressure
As unusual as it is, the gesture of the Department of Justice has not come out of nowhere. Political figures left and right, including Senators Elizabeth Warren and Bernie Sanders and President Donald Trump, called for a more in-depth examination of the market power of large technology companies and even, in many cases, their dissolution.
"The political pressure on agencies in Washington is enormous for them to consider technology to be important," said Daniel Crane, a professor at the University of Michigan Law School, who focuses on antitrust issues. He continued: "It's their way of reacting to political pressure".
But Balto thinks there's something more going on. Last month, the Wall Street Journal announced that the FTC and the Justice Department had split surveillance of technology giants. Under the agreement, the FTC had authority over Facebook and Amazon, while the Department of Justice oversaw Apple and Google's parent Alphabet.
The problem with this arrangement was that Mike Lee, chair of the subcommittee of the Senate Judiciary Committee on Antitrust, Competition Policy and Consumer Rights, objected, noted Balto. In an article published by the Washington Examiner last month, Lee spoke of the idea that agencies would divide supervisory tasks among large technology firms. Both agencies are likely to duplicate and cause divergence in law enforcement, he said.
"These surveys will clearly cover much of the same ground," Lee said in his editorial. "The antitrust investigation division of these companies between two agencies," he continued, "is simply badytically inefficient."
The Department of Justice says it's in charge
Lee's subcommittee was scheduled to hold a hearing on Tuesday with key Trump antitrust regulators, during which he is expected to question him on the decision to split oversight of technology companies. This hearing was eventually postponed, but, according to Balto, the announcement by the Department of Justice allowed him to respond to Lee's concerns by taking a stand.
"It's really the Ministry of Justice that says," Thank you, it's my football and I intend to play with it, "he said.
The Wall Street Journal reported Tuesday that the Justice Department's review would not prejudge the FTC's ongoing investigations with companies under its jurisdiction.
Balto said that if the Justice Department left some questions to the FTC, Tuesday's announcement indicates that the DOJ claims all the demands regarding online platforms and market issues, which are at the heart of the antitrust charges against the big tech companies. Senator Elizabeth Warren and others have worried about how these companies are using their control over their platforms and their markets to give their own products and services a step ahead of their rivals.
"These issues are incredibly complex, time consuming and very difficult to manage, and the fact that two agencies are looking at the same behavior really does not make sense," Balto said.
Lee's office did not respond to calls or an e-mail requesting comment. Similarly, the Department of Justice did not respond to an email requesting comments.
This decision could be good news for tech giants
The announcement of the opening of the review by the Justice Department was seen as a negative sign on Wall Street on Tuesday. The share prices of the four big companies all fell as a result of this announcement.
But asking the Department of Justice to rule on antitrust review is actually a good thing for high-tech companies, Balto said. The Department of Justice has not initiated a major lawsuit under the Sherman Antitrust Act since the Microsoft case two decades ago. And the agency actually has fewer legal options for controlling competition than the FTC, he said.
"I do not think anyone will lose more sleep than this is with the Department of Justice," Balto said. "They will feel more comfortable in their legal situation."
For his part, Crane doubts that investigations will succeed in the near future, regardless of the organization responsible. With respect to antitrust enforcement, the FTC's track record has been little better than that of the Ministry of Justice in recent decades, despite stronger theoretical powers, he said.
Courts have prevented regulators from winning antitrust cases, and even when such cases succeed, they tend to take many years. Because of this, there is little chance that big tech companies will be dismantled, despite the political pressure on them, he said.
"The kind of blockbuster," break it up "of the case that is politically criticized, I do not see it getting ready, Crane said.
Do you have any advice on the technology industry? Contact this reporter by e-mail at [email protected], send him a message on Twitter @troywolv, or send him a secure message via Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.
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