Big tech's time of reckoning: It looks like Trump is making good on his threat to take on Google and Amazon
- The wheels are turning on two potentially seismic US antitrust investigations into Google and Amazon.
- The Wall Street Journal reported Friday that the DOJ is getting ready to launch an antitrust investigation into Google. This was later confirmed by a Business Insider source.
- The next day, The Washington Post reported that the DOJ and the FTC had carved up Google and Amazon as their respective territories.
- The Trump administration may be attempting to divide and conquer amid appetite on both sides of the political aisle for reining in big tech.
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Big tech's time of reckoning looks to be drawing closer with the wheels turning on two potentially seismic US antitrust investigations into Google and Amazon.
This weekend, two reports surfaced about Washington edging closer to a showdown with the tech giants. The Wall Street Journal reported on Friday that the Department of Justice is readying an antitrust investigation into Google.
This was later confirmed to Business Insider by a source on Capitol Hill. As far as our source knows, the investigation will be open to looking at "everything" about Google. "Adtech, privacy, even the flagship search product," the source said.
The Washington Post then reported on Saturday that, in sorting out the details for the Google antitrust probe, the DOJ had agreed with the Federal Trade Commission that Google would be its territory, while the FTC would focus on Amazon.
While this might seem like a dry procedural manoeuvre, it could also signify that the mechanics are slotting into place for a major assault on big tech. The Trump administration may be attempting to divide and conquer, and in doing so, making good on a threat the president made last year, when he said Google, Amazon, and Facebook may be "very antitrust."
The winds are in his favor, with an appetite on both sides of the political aisle for reining in big tech.
Democratic presidential candidate Elizabeth Warren has made breaking up the tech giants a cornerstone of her campaign. She linked to the Journal's report on Google on Sunday, tweeting: "Google has too much power, and they're using that power to hurt small businesses, stifle innovation, and tilt the playing field against everyone else. It's time to fight back."
President Trump, meanwhile, has fanned the flames of Republican discontent with Google, Twitter, Facebook over perceived liberal bias. Accusations of anti-conservative bias in Silicon Valley companies have spurred Republicans into scrutinising big tech more closely.
Republican and Democrat lawmakers have even started to actively team up. Democratic Senator Richard Blumenthal and Republican Senator Josh Hawley co-wrote a letter to the FTC chairman last month urging him to issue Facebook with a more severe punishment than a multi-billion dollar fine.
This is in relation to Facebook's missteps over the Cambridge Analytica breach, which could be punished with a penalty of between $3 billion to $5 billion - another sign that big tech is facing hostility in Washington.
Antitrust lawyer Gary Reback told CNBC that resentment towards the Silicon Valley giants has been building in Washington for some time. While the Trump administration may not have been triggered this flurry of regulatory action, he said, "it could have been what broke the dam." Reback's work on Microsoft paved the way for the US government to launch its antitrust case in 1992.
Google and Amazon have already come under increased scrutiny in Europe. The European Commission levied a series of massive fines on Alphabet for abusing its market dominance. It fined Google €1.5 billion ($1.69 billion) for forcing sites to use AdSense; €2.4 billion ($2.7 billion) for promoting its own shopping sites above others in search results; and €4.3 billion ($5 billion) for abusing the dominance of Android. Google is appealing the latter.
In September of last year, EU competition commissioner Margrethe Vestager said the commission had launched a preliminary investigation into Amazon over potential antitrust violations.
Google and Amazon were not immediately available for comment when contacted by Business Insider.