WASHINGTON _ The technology industry is girding for sweeping investigations into its business practices as top U.S. antitrust enforcers divide up scrutiny of some of Silicon Valley's best-known names, sending shares of the biggest companies tumbling on Monday.
The Federal Trade Commission will take responsibility for antitrust probes of Facebook Inc. and Amazon.com Inc., while the Justice Department is set to open an investigation of Alphabet Inc.'s Google, according to people familiar with the matter. The Justice Department will also oversee scrutiny of Apple Inc., Reuters reported.
By parceling out antitrust oversight, the U.S. government has set the stage for formal inquiries and escalated pressure on the companies amid increasing criticism that their practices are harming competition in digital markets. After years of being hands off on the industry, enforcers are on the verge of opening broad investigations that could yield significant changes to how the companies do business.
Shares of technology companies fell on the news of the broad agreement between the Justice Department and the FTC, which put the biggest U.S. technology giants in law enforcement's crosshairs and could have broader ramifications across the industry.
Alphabet shares fell 6.4% to $1,033.31 at 2:10 p.m. in New York, the most since April 30. Amazon shares declined 4.3% to $1,699.58. Facebook fell 7.4% to $164.27 after falling as much as 9.3%. Apple shares fell 1% to $173.29.
Heightened Scrutiny
The companies have come under heightened criticism over their dominance in respective markets and claims that they are thwarting competition to the detriment of consumers. Complaints are specific to each company but stem from their role as digital platforms that have gained outsized market shares.
The tech firms are grappling with increasing antagonism in Washington, where Republicans and Democrats have called for tougher scrutiny of their conduct. Democratic Presidential candidate Elizabeth Warren is calling for breaking up tech giants, while President Donald Trump has railed against social media companies for suppressing conservative views.
That criticism has put pressure on enforcers to scrutinize the companies after years of standing back. Earlier this year, the FTC set up a task force to examine the conduct of tech firms to determine whether they are violating antitrust laws. It will also look at past mergers in the industry that could potentially be unwound if they are found to have harmed competition.
Google, Facebook and Amazon declined to comment, as did the Justice Department and the FTC. Apple didn't immediately respond to requests for comment.
Antitrust scrutiny of Google could come from its large or majority market share in several important industries, including online advertising, internet browsers, mobile operating systems and email.
One area at Google where U.S. investigators will likely look closely is its role in the online advertising ecosystem. Google sells much of the online real estate available to advertisers, such as search ads and spots that play before YouTube videos. It also controls the system that many advertisers use to place and track ads on non-Google websites through its DoubleClick unit.
Facebook also controls a large piece of the digital advertising market, though criticism of the company goes much further. Facebook has been under fire over its role in allowing Russian actors to interfere in the 2016 U.S. presidential elections. Also raising hackles is Facebook's failure to shield users from harmful content or protect the privacy of people who give up personal information in exchange for access to its social network. In recent months, pundits and former Facebook employees have publicly advocated for a breakup of the company.
The antitrust debate about Amazon has focused less on the company's raw market share, and more on the many roles the company plays in operating the biggest online marketplace. The European Union is investigating whether Amazon uses data about the third-party merchants who sell on its retail site to give the company an advantage when it sells its own products. Warren has suggested that Amazon should be barred from competing with the smaller players that sell their wares on its marketplace.
