D-C Heat For Big Tech

Federal antitrust enforcers and lawmakers are poised to scrutinize the nation’s largest technology companies for potential anticompetitive practices, bringing a new regulatory focus to the vast markets for digital services and a new level of concern for investors, reports The Wall Street Journal.

After years when the government took a broadly laissez-faire attitude toward the regulation of Silicon Valley, antitrust officials at the Justice Department and Federal Trade Commission are choosing lanes with a view to studying the practices of at least four of the world’s largest and highest-profile tech companies.

Under a series of arrangements between the two agencies, the Justice Department now has authority over any potential antitrust investigation into Alphabet Inc.’s  Google and Apple Inc., while the FTC has oversight of Facebook Inc. and Amazon.com Inc. Google and Facebook appear to be closest to being in the agencies’ investigative crosshairs, according to people familiar with the matter.

Separately, the House Judiciary Committee made public its own investigation Monday into competition in digital markets, which will include multiple hearings along with requests for information to the major businesses, the panel said. In addition to any competitive problems in digital markets, the probe will look at whether current antitrust laws and enforcement efforts have kept pace with technological change.

The moves among government enforcers and lawmakers over the same broad issues, and the prospect of prolonged scrutiny, rattled investors in the companies, which are all among the biggest in the world by market value.

Facebook shares slid 7.5% Monday while Alphabet lost 6.1%. The selling pulled the Nasdaq Composite Index into correction territory, or 10% below its May record close.

It is too early to assess whether these early moves in Washington will fundamentally alter the companies. But they mark a new level of concern over a sector that prided itself in the past in staying out of the political spotlight.

The Wall Street Journal reported Friday that the Justice Department was gearing up for a probe of Google and on Monday that the FTC is in the driver’s seat for scrutiny of Facebook, the result of a recently brokered deal between the two agencies. It couldn’t be determined whether the allocations of Apple and Amazon were related to the same agreement; these companies may be a less urgent focus of the agencies, according to people familiar with the matter.