Big tech's giant power could be challenged in blockbuster antitrust probes - here's what that means for Apple, Amazon, Facebook, and Google

Zuckerberg Pichai Cook BezosFrom left to right, Mark Zuckerberg, Sundar Pichai, Tim Cook, and Jeff Bezos.Getty/Carsten Koall/Michael Kovac/Business Insider composite

  • Reports in recent days suggest that the wheels are turning on blockbuster antitrust investigations into Apple, Amazon, Facebook, and Google.
  • The Federal Trade Commission and Department of Justice have apparently carved up which of the big tech companies they would examine, should they begin antitrust proceedings.
  • If investigations are launched, it could transform the big tech landscape, potentially resulting in seismic breakups or giant fines.
  • Read on to find out what antitrust proceedings could look like for the FAANG companies, and which Trump administration body will take the lead on the investigations.
  • Visit Business Insider's homepage for more stories.

The wheels are turning on potentially blockbuster US antitrust investigations into big tech.

Reports in recent days suggest that Apple, Amazon, Facebook, and Google could all face scrutiny after the Federal Trade Commission and Department of Justice carved up which of the big tech companies they would examine.

It follows US President Donald Trump saying last year that the firms could be "very antitrust," while appetite among Republicans and Democrats has increased for greater oversight of the tech monoliths.

Read more: Big tech's time of reckoning: It looks like Trump is making good on his threat to take on Google and Amazon

Politicians on both sides have been ramping up their rhetoric. Elizabeth Warren has made breaking up big tech the rallying cry of her presidential candidacy campaign, and Republican lawmakers have laid into the Silicon Valley elite for perceived anti-conservative bias.

Add this to the fact that some of the companies have already received antitrust fines in the EU - not to mention ongoing complaints and investigations - and it looks like big tech could be headed for turbulence.

There is little detail about the substance of the investigations, but read on to find out what antitrust proceedings could look like for Apple, Amazon, Facebook, and Google companies, and which Trump administration body will take the lead on the probes.

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Apple

Why: Apple is facing at least two antitrust complaints from tech industry players, relating to its control of the App Store. This could provide a clue as to where investigators might ask questions of Apple.

Music streaming service Spotify filed an antitrust complaint with the EU in March, accusing Apple of "acting as both a player and referee to deliberately disadvantage other app developers." Apple said Spotify was simply bidding to increase its profit margins.

Elsewhere, two parental screen-time control apps complained after Apple removed them from its App Store, saying they were using a "highly invasive" technology called Mobile Device Management (MDM). The app developers said the decision to remove them coincided with Apple releasing its own Screen Time feature.

Apple was emphatic in its denial that the decision was rooted in quashing competition, asserting it was purely to do with security. On Monday, however, Apple backtracked, saying it would allow some apps to use MDM.

Who: Reuters reported that Apple has been designated as the territory of the DOJ in the recent divvying up of tech firms between the DOJ and the FTC.

No reports have said the DOJ is ready to investigate Apple, but rather should it receive a complaint, Apple will be within its purview.

The Supreme Court also paved the way for antitrust complaints against Apple in May, waving through a lawsuit by iPhone owners accusing the company of abusing the dominance of the App Store.

Amazon

Why: Amazon's size makes it a target for lawmakers looking to break up big tech, but more specifically its role as both marketplace and vendor has come under scrutiny.

Amazon tries to downplay its size — in his 2018 letter to shareholders, CEO Jeff Bezos insisted the company is still a "small player" in retail, as roughly 90% of shopping still happens offline.

But when it comes to online sales, Amazon is the biggest fish by a considerable margin, taking up 49% of market share. The next biggest player, eBay, commands a little over 6% of the market.

Presidential hopeful Elizabeth Warren has consistently attacked Amazon's business practices concerning small vendors, arguing Amazon can use its masses of retail data to decide when to knock out smaller competitors with its own products.

"When Amazon can tilt the online marketplace in its own favor, small businesses see an immediate impact in their profits," said Warren.

In a rare response, Amazon countered Warren, saying it doesn't use sellers' data to plan its private product launches. "And sellers aren't being 'knocked out' – they're seeing record sales every year," Amazon tweeted.

But it's not just Elizabeth Warren who wants to put Amazon's treatment of sellers under the microscope. European Commissioner for Competition Margrethe Vestager announced in September last year that she was launching a preliminary investigation into Amazon. She said Amazon's use of seller data would be scrutinized.

Who: The Washington Post reported that the FTC will be responsible for Amazon, although it is not immediately clear whether the agency plans to launch any kind of probe.

Facebook

Why: Although details about what a Facebook antitrust investigation might look like are thin, it would not be a big leap to assume that regulators may choose to inspect its ownership of Instagram and WhatsApp.

Calls for Facebook to be broken up have grown in volume after a series of disastrous missteps, including election interference on the social network in 2016 and the giant Cambridge Analytica data breach last year.

Leading those calls have been former Zuckerberg allies, like early investor Roger McNamee, and more recently, Facebook cofounder Chris Hughes. In a New York Times op-ed, Hughes said Facebook, Instagram, and WhatsApp should be divided into three publicly traded companies.

"The American government needs to do two things: break up Facebook's monopoly and regulate the company to make it more accountable to the American people," he added. Facebook CEO Mark Zuckerberg said the proposal "isn't going to do anything to help."

Facebook has already been clobbered with one antitrust ruling this year. Germany's antitrust regulator told the firm it must stop forcing users to allow it to collect and combine their data from sources outside Facebook, like Instagram and WhatsApp.

Who: Reuters was among those to report that it would be the Federal Trade Commission that would oversee a Facebook antitrust investigation. The FTC is currently drawing to a close a probe into the Cambridge Analytica breach, which could result in a fine of up to $5 billion for Facebook.

Google

Why: Google's sheer ubiquitousness as the world's most popular search engine, which hoovers up reams of data about its users, as well as providing the mobile operating system for the vast majority of non-Apple smartphones (while also selling its own smartphone the Pixel) could be sources of concern for lawmakers.

In Europe, the company has already been hit with three antitrust fines over the past three years. The European Commission has fined Google:

Google is currently appealing the first two fines, but the Android ruling has already resulted in change, with Google announcing it would make it easier for Android users to select competing browsers and search apps.

Who: The Wall Street Journal reported that the DOJ is gearing up to launch an antitrust investigation into Google. The scope of the investigation is unclear, but a Washington insider source told Business Insider that it's likely to examine everything including Adtech, privacy, and Google search.

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