The United States Justice Department announced late Tuesday that it is finally conducting a probe on the biggest American tech firms engaged in unfair trade practices following months of guesswork.
The disclosure sent shares of Facebook, Alphabet, and Amazon backpedaling in after-hours trading, with some analysts anticipating the retreat could drag down other major tech stocks.
While the judiciary has yet to divulge specifics with regards corporate profiles, it is carrying out the investigation based on so-called "new threats on Washington" posed by blue-chip firms Apple Inc, Google, Amazon and Facebook, Wall Street Journal said.
Digging deeper
In a nutshell, US lawmakers will zero in on anti-competitive practices of Internet-based platforms that dominate online search, including retail and social media services, the US Justice Department said.
The DOJ's announcement likewise comes on the heels of similar inquiries being worked out by the Federal Trade Commission (FTC) and Congress, which shares the same responsibilities in anti-trust issues with the judiciary.
"The department's antitrust division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers," the DOJ announced.
Expanded powers
The investigation, by far, is the strongest move by the Justice department towards the "Big Tech", which has been facing heightened scrutiny from both politics due to their expanded control of the markets and the huge amount of consumer information that they possess.
US President Donald Trump, a known critic of e-commerce giant Amazon, has accused Facebook of being one-sided against conservatives and not long ago, agreed with tech investor Peter Thiel that perhaps the government should also investigate Google for not cooperating with the federal authorities on a Cloud project.
The enforcement of new laws against multi-billion tech companies has wrapped up years of deferential treatment toward the business sector. In Congress, the anti-trust sub-committee of the House Judiciary is currently conducting its own review of the market influence and behavior of these tech powers.
Shares in the largest U.S. tech companies took a hit in after-hours trading. Stock in Amazon, Alphabet, and Facebook fell more than 1%, while shares in Apple and Microsoft Corp. MSFT, +0.62% - the largest tech company by market value, which already faced antitrust charges in the U.S. nearly two decades ago - declined by less than 1%.
