‘GAFA’ Break Up In The Offing? US Justice Department Opens A Sweeping Antitrust Review of Big Tech Companies

Swarajya Staff

Jul 26, 2019, 11:01 AM | Updated 11:01 AM IST

(The big four)
(The big four)

The United States Department of Justice (DoJ) has announced that it will be launching a comprehensive anti-trust review to establish whether the country’s leading technology behemoths are engaging in practices that have reduced competition, stifled innovation and in the process harming consumer interests.

The DoJ press release signalled that the probe was a response to "widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online."

“Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands,” Assistant Attorney General Makan Delrahim of the Antitrust Division said in a statement.

While the DoJ statement does not explicitly identify any specific companies, the likely targets of probe could include Facebook, Amazon, Google and Apple.

By operating as both platform and marketing their own goods and services on it, dominant platforms especially Amazon have placed themselves in direct competition with some of the businesses that depend on them, creating a potential conflict of interest that platforms can exploit to further entrench their dominance, thwart competition, and stifle innovation.

The DoJ is already working with Federal Trade Commission (FTC) in reviewing competitive practices in the tech industry, to identify potential antitrust violations. The FTC is focussed on and Facebook, while the DoJ leads on Apple and Alphabet.

The Federal Trade Commission has slapped a $5 billion penalty on Facebook to settle a probe into the social network’s privacy and data protection lapses. Facebook admitted to sale of user data to Cambridge Analytica during the 2016 campaign.

Several commentators have called for either break-up, or strongly regulate the four corporate oligarchs, who can be collectively grouped under the acronym GAFA – short for Google, Amazon, Facebook and Apple- for monopolistic tendencies.

Google is a clear monopoly, with a 92 per cent market share in internet searches. In smartphones, the Google Android operating system has a 75 per cent market share, and in browsers, Google’s Chrome has 56 per cent. Gmail’s share of email is lower at around 20-21 per cent, but that’s still 1.2 billion users – it’s like owning the whole of Africa or India. Google is the overwhelming champ in maps, too.

Also Read - GAFA Monopoly: Why Google, Amazon, Facebook And Apple May Need Breaking Up

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