DOJ Targets Silicon Valley Tech Companies in Antitrust Probe

The Department of Justice on Tuesday announced it will launch an investigation to determine if some tech companies have become too powerful.

No companies were cited by name, but three Silicon Valley giants — Facebook, Google and Apple — are believed to be at the center of the inquiry.

Questions over the market dominance of those companies and the harmful consumer behavior that’s come as a result have been on the lips of Congress, the president, even the Federal Trade Commission for a long time.

But it’s been awhile, more than 20 years, since the government has brought antitrust action against a major tech company. In that case, the company was Microsoft.

Tuesday’s announcement from the DOJ was relatively brief, and no companies were named. But reports from the Wall Street Journal and other news outlets indicated Facebook, Google, Apple and Amazon are the companies being investigated.

Senior staff attorney for the Electronic Frontier Foundation believes under the current model, a cycle of competition has broken down.

“Their size and reach is … what keeps their dominance sticky,” foundation attorney Mitch Stoltz said. “Because it’s something for other companies that’s really hard to duplicate … in fact it’s practically impossible.

“Venture capitalists talk about a ‘kill zone’ around Google and Facebook,” Stoltz continued. “A zone of business in which companies are really likely to be shut down or bought out by one of those giants.”

The DOJ released a statement, saying in part: “The department’s antitrust division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers. … If violations of law are identified, the department will proceed appropriately to seek redress.”

What that redress will look like is the big question. Breaking up companies is rare and some say unlikely. But it’s something that has been suggested by both Republicans and Democrats.

The DOJ could also decide to require separate businesses for say social media, and advertising or demand the tech titans make it easier for employees to move data or contacts to another company.

This post was originally posted at http://www.nbcbayarea.com/news/local/DOJ-Targets-Silicon-Valley-Tech-Companies-in-Antitrust-Probe-513121261.html.

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