Stock prices of the major U.S. stock companies all took a tumble in after-hours trading today after the U.S. Justice Department revealed that it is launching a broad antitrust investigation into tech companies.
The department has not said which companies will be investigated specifically but it’s pretty likely that Apple, Amazon, Google and Facebook will be swept up in the case.
In a letter announcing the investigation, the Justice Department says it will investigate whether online platforms reached and maintain market dominance by engaging in practices that stifle competition.
“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “The Department’s antitrust review will explore these important issues.”
Big Tech under investigation
This is the strongest move by the U.S. government against the major tech companies we’ve seen this year. Throughout 2019 both Amazon, Facebook, Google and Apple have been accused of having monopolies. President Donald Trump has continuously railed against Amazon while Democratic presidential candidate Elizabeth Warren has called for the breakup of some major tech companies.
The investigation will look into how the top tech companies grew in size and expanded their reach into other businesses. Officials are interested in whether the companies have “stifled innovation or otherwise harmed consumers.”
Just this morning Apple was the subject of a report that claimed the iPhone-maker gives its own apps preferential treatment in the App Store’s search results. Spotify has also been a vocal opponent of the App Store too saying that it’s unfair of Apple to take a 30% cut on App Store generated revenues.
Tim Cook said in an interview last month that Apple is not a monopoly because it doesn’t have a dominant position in any of the markets it does business in.
“I think we should be scrutinized. But if you look at our — 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,” said Cook.
We’ll soon see if Trump’s administration agrees with him.