Investors have “pummelled” technology stocks, says The New York Times. Facebook shares fell by more than 7% last Monday, while Google and Amazon shares were also sharply lower. US regulators are reportedly “divvying up antitrust oversight of the Silicon Valley giants”, with the Justice Department agreeing “to handle potential antitrust investigations related to Apple and Google, while the Federal Trade Commission will take on Facebook and Amazon”. At the same time, lawmakers are investigating “whether they have stifled competition and hurt consumers”, and are even considering updating antitrust laws “to keep up with an industry that didn’t exist when antitrust laws were written”.
It’s “hard to deny” that the big tech companies enjoy a huge degree of market power, say Robert Cyran and Gina Chon on Breakingviews. For example, Amazon “controls about half of the US e-commerce market” while Alphabet dominates internet advertising thanks to a 95% share of mobile search. An antitrust investigation is a “no brainer”. Still, the agencies will “struggle to prove that consumers are being harmed by their huge scale” especially since Internet users are “lavished with free services” by Google, while Amazon provides “countless products at generally low prices”. After all, a previous investigation into Google “ended with a whimper” in 2013.
Regulators “would do well to remember that past crackdowns on tech behemoths have come only after good old competition did their job for them” says Dan Gallagher in The Wall Street Journal. For example, Google, and its parent company Alphabet, “is showing – on its own – that it is far from invincible”. For instance, its search dominance has failed to translate into other markets, such as smartphones, where Google Pixel has a mere 1% share.
Is the tech sector’s time up?
But things could be different this time. The tech giants “should be quaking in their fleece vests”, says Shira Ovide on Bloomberg. This is because any investigation “will no doubt be broad, lengthy, messy, and impossible for Google and its investors to predict”, especially “once the US government pores over every internal email and business… contract”. This “will also be an open invitation for every company or individual with a gripe against Google to pile on”. Of course, if the Feds discover anything this will “embolden critics of Facebook, Amazon and other tech giants as well”. What’s more, for the first time, tech is facing “political heat“ from both sides of the political spectrum, says Edward Helmore in The Guardian. Overall, experts agree that the latest move confirms that “the days of the essentially unregulated ‘Wild West’ for big tech could be nearing an end”.