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Amazon Faces New Pressure After US Antitrust Agencies Revamp Oversight

Courtesy of ZeroHedge. View original post here.

A new agreement between the Federal Trade Commission (FTC) and the Department of Justice (DOJ) will place Amazon and Google under heightened antitrust scrutiny, according to Jeff Bezos’s Washington Post.

According to the report, the US government’s two leading antitrust agencies have been quietly divvying up competition oversight of the two tech giants – a move long sought by both Democrats and Republicans on Capitol Hill who have called for more oversight. 

The FTC is said to have jurisdiction over Amazon, while the DOJ will reportedly oversee Google according to the Post - setting the stage for enhanced scrutiny of the Mountain View-based search-and-advertising company. The New York Times reports that the DOJ is actively exploring an investigation of Google’s advertising and search business, according to several people with knowledge of the discussions. The Times adds that the agency’s interest stems in part from rivals’ complaints. 

The DOJ and FTC have declined to comment, however former FTC chair Maureen Ohlhausen said: “If there is an active discussion of where the boundaries are, that would indicate there’s a reason for that discussion, whether it’s a new interest, study or investigation.“ 

The early moves from the government’s twin antitrust agencies mark the latest attempts by U.S. regulators to better supervise tech giants. Earlier this year, the FTC established a special task force it said would monitor tech and competition, including “investigating any potential anticompetitive conduct in those markets, and taking enforcement actions when warranted.”

For years, the European Union has taken the lead in probing whether Silicon Valley too easily stamps out rivals to the detriment of web users. E.U. officials are actively investigating Amazon and have repeatedly fined Google for violating its antitrust laws. -Washington Post

2020 Democratic candidate Elizabeth Warren (D-MA), who has long run on a platform of consumer protection, recently threatened Amazon, Apple and Facebook with major investigations. Warren came out this week in support of a potential DOJ investigation of Google. 

Politicians and small business owners have long complained that Amazon has concentrated too much power in their dominance of online retail, along with its growing reach across a variety of other types of businesses. According to the Post, “It holds sway over third-party sellers on its site, who pay for advertising to compete against first-party and private-label sales by Amazon. Its low prices also have helped it draw customer spending at the expense of brick-and-mortar competitors.

Amazon sells around half of all goods bought online in the US, however its share of overall retail sales is much smaller. 

It has expanded into other areas, too, such as cloud computing with Amazon Web Services and grocery sales with the acquisition of Whole Foods, a deal the FTC allowed to proceed in 2017.

Google’s chief critics contend the company has acted illegally to protect its huge footprint in search and advertising as well as its newer ambitions, ranging from smart thermostats to self-driving cars. The FTC previously investigated Google but closed the matter in 2013 without breaking it up or forcing it to make major changes to its business practices. -Washington Post

According to Gene Kimmelman, president of DC-based consumer advocacy group Public Knowledge, “This should be a wake-up call to both Google and Amazon to behave themselves because it at least shows that the Justice Department and FTC are thinking about them.”

“This is more of a warning to the companies that they’re being carefully scrutinized and they need to be careful not to play fast and loose given their dominant positions in the digital marketplace.” 

A prospect that should really worry Google and Amazon is a replay of the government’s case against Microsoft in the 1990s. Microsoft did not have to break itself into two, which was the government’s goal. But the company was distracted for at least a decade, which allowed space for start-ups like Google. Microsoft’s reputation took a dive. -New York Times

And according to Silicon Valley lawyer Gary Reback, who was ‘instrumental’ in the case against Microsoft, “The damage to the monopolist’s position comes from the public airing of the facts.” 


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