Sep 17, 2019

Top regulators battle to crack down on Big Tech giants

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Data: Axios research; Table: Andrew Witherspoon/Axios

As investigations into tech giants' possible anti-competitive behavior multiply, authorities are beginning to tussle over turf — adding a new potential for discord to the regulatory chess game.

Why it matters: These probes are legally complex and historically difficult to pull off. There's bipartisan support right now for checking Big Tech's power, but the companies have enormous resources and remain popular, and fighting among regulators can only hamper their work.

Driving the news: Federal Trade Commission Chairman Joe Simons has written a letter to the Justice Department's antitrust division complaining about the DOJ's behavior in handling disagreements over which agency has the authority to probe Facebook, The Wall Street Journal reports.

  • Sen. Mike Lee (R-Utah) intends to bring up the letter and address the issue at a Senate Judiciary antitrust subcommittee hearing Tuesday, his office confirmed to Axios.

Be smart: Both agencies have clashed over who has jurisdiction to investigate, particularly Facebook.

  • Earlier this year the two agencies agreed that they would divide up investigations into the companies, with the DOJ taking on Alphabet (the parent company of Google) and Apple, and the FTC looking into Facebook and Amazon.
  • Tensions apparently rose in July when the DOJ announced another sweeping investigation into Big Tech platforms for their dominance, a move which reportedly had the FTC concerned that the DOJ would be stepping on its turf to investigate Facebook.

The big picture: A growing list of media investigations are presenting evidence of tech platforms abusing their dominance to promote their own products and services.

  • On Monday, the Journal reported that Amazon has changed its search function to more prominently feature products that are more profitable for the company. Amazon denies the report, saying it features products customers want, "regardless of whether they are our own brands or products offered by our selling partners."
  • Last week, a New York Times investigation revealed that Apple-owned apps often top rivals in its own App Store.
  • Friday, the House Judiciary Committee sent Facebook, Google, Apple and Amazon lengthy document requests, including executives' private communications, for its own investigation into the companies' practices.

The bottom line: Multiple probes can help regulators cover the vast territory they have set out to explore. But any time and resources they spend fighting each other will only benefit the companies they are seeking to hold accountable.

Go deeper: The growing list of U.S. government inquiries into Big Tech

Editor's note: This story has been updated since publication.

Go deeper

Rivals aim to document Facebook, Google strong-arming

Sarah Grillo / Axios

Smaller competitors to Google and Facebook that for years kept their legal grievances about the companies silent are beginning to speak up, as regulators crank up probes into anti-competitive behavior by the two Silicon Valley giants.

Why it matters: Many smaller tech companies once hesitated to call foul on Facebook and Google's dominance, fearful that doing so would make them look weak or unable to compete. Now that regulators are reaching out for information, more smaller rivals are stepping up.

Go deeperArrowSep 24, 2019

NY attorney general talks Facebook with DOJ

New York State Attorney General Letitia James. Photo: Drew Angerer/Getty Images

New York Attorney General Letitia James, a Democrat, heads to Washington Monday to discuss the state-level antitrust investigation of Facebook she's leading with top Justice Department officials, according to a person familiar with her plans.

Why it matters: The meeting could be a precursor to the DOJ joining the Facebook investigation, which is led by New York and includes 7 other state attorneys general, plus D.C.

The big picture: James has been at the forefront of lawsuits challenging the Trump administration over immigration, environmental rollbacks and other policies, and she is also at odds with the Justice Department over the T-Mobile-Sprint merger. If she and Trump's DOJ can find common cause investigating Big Tech's power, that would be one more sign of the issue's bipartisan appeal.

Details: James is expected to meet with Attorney General William Barr, Deputy Attorney General Jeffrey Rosen and Associate Attorney General for antitrust Makan Delrahim, the person familiar with the plans said. A bipartisan group of state attorneys general is also expected to join the meeting, the person said.

  • Iowa Attorney General Tom Miller and Nebraska Attorney General Doug Peterson were part of the group of state officials in Washington for the meeting, according to their offices.
  • States investigating Google for anticompetitive practices —  including Texas and New York — sent representatives to meet with top DOJ officials in July to discuss tech antitrust issues. 
  • The Justice Department and FTC split jurisdiction over major tech companies for competition concerns earlier this year, with the FTC taking up an antitrust investigation into Facebook. But, as Bloomberg reported, Barr prodded his agency to begin its own Facebook inquiry, prompting concerns from both FTC chairman Joe Simons and Republican Sen. Mike Lee about overlapping investigations.
  • The state attorneys general also discussed the Facebook investigation at the FTC today, according to a spokesperson for the New York AG’s office.
  • The states met with FTC chairman Joe Simons, some of the commissioners, and staff from the Bureau of Competition, an FTC spokesperson said.

What they're saying: “We have grave concerns over potential anticompetitive practices by large tech companies," James said in a statement. "We are concerned that Facebook’s actions may have put consumer data at risk of data breaches, reduced the quality of consumers’ choices, and increased the price of advertising, so we will continue to work in a bipartisan manner to protect consumers and protect competition.”

  • A Justice Department spokesperson declined comment.

The bottom line: Pressure on Facebook and other tech companies is building from state capitals to Washington, where lawmakers and regulators are conducting their own investigations into the power of tech.

  • A move by the states and DOJ to join forces would mirror the antitrust investigation of Microsoft in the '90s, in which the Justice Department and several state attorneys general together sued the company.

Editor's note: This story has been updated with comment from James and details about the state attorneys general meeting with the FTC.

The war on Amazon

Illustration: Sarah Grillo/Axios

For the last 2 years, Amazon has largely been a subplot in the global backlash against Big Tech, with much of the scrutiny on Facebook, Uber and Google — until now.

Why it matters: Amazon is one of the richest companies in history, and for decades, no amount of bad news has stuck to it. Now, an onslaught of regulatory investigations and critical coverage is putting the behemoth on the defensive.

Go deeperArrowSep 19, 2019