U.S. Antitrust Task Force Target Tech Giants

(Bloomberg) -- U.S. antitrust enforcers are zeroing in on technology giants following years of criticism that they haven’t done enough to rein in dominant internet companies like Alphabet Inc.’s Google and Facebook Inc.

The Federal Trade Commission on Tuesday said it’s creating a task force led by senior competition officials and 17 staff lawyers to investigate potentially anticompetitive conduct by technology companies. It will also look at completed mergers in the industry that could be unwound if they turn out to be harmful to consumers.

“This industry continues to grow in importance and complexity, and it poses challenges for antitrust enforcement," Bruce Hoffman, the head of the competition bureau, told reporters on a conference call.

The creation of the task force signals FTC Chairman Joe Simons’s desire to bring more scrutiny to tech giants in the U.S. following aggressive enforcement by European antitrust officials against Google and Facebook. A chorus of lawmakers, lawyers, economists and policy advocates have criticized the U.S. for its mostly hands-off approach to tech markets.

“It’s hard for us to know what kind of anticompetitive behavior is going on behind the scenes,” said Charlotte Slaiman, a policy counsel for Washington-based policy organization Public Knowledge. “I hope having this extra focus on it will uncover that.”

Closed Google Probe

The FTC under a previous chairman in 2013 closed a 20-month antitrust investigation into whether Google unfairly skewed its search results. The decision not to take enforcement action against the company was a blow to rivals that claimed the company’s dominance in internet search was harming competition.

The Information Technology and Innovation Foundation, a think tank whose board includes executives of technology companies, said the task force isn’t a surprise given the antitrust criticism directed at the industry.

"There’s this growing tech backlash and there’s a growing movement of what one could call the anti-monopoly left who sees any big firms as suspect," said Rob Atkinson, president of ITIF. "We put those two things together, and I believe there’s a real risk that the FTC could go too far here and begin to question or take actions against large technology firms simply because they’re large."

The announcement of the task force was ridiculed as a "joke" by Matt Stoller, a fellow at Open Markets Institute in Washington, which advocates for aggressive antitrust enforcement.

"They just don’t want to do anything, and they continue to put out excuse after excuse after excuse,” Stoller said about the agency. “There’s a crisis of legitimacy at the FTC.”

Maurice Stucke, who teaches antitrust law at the University of Tennessee, said he’s optimistic the task force can help the agency grapple with today’s data-driven economy, including developing tools to better understand pricing algorithms that may be used to collude and escape antitrust liability.

The FTC’s Hoffman said the agency would consider all options -- including a breakup or spinoff -- if a merger turned out to be anticompetitive after it closed. Although Hoffman declined to comment on specific companies or investigations, Facebook’s 2012 acquisition of Instagram and its 2014 purchase of WhatsApp are examples of mergers that critics argue shouldn’t have been approved.

“It would be useful to consider transactions that have occurred in the digital space in the past to determine whether any of those might be the subject for an investigation,” Hoffman said.

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