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DOJ antitrust chief warns Big Tech that low prices or free products will not protect them



Makan Delrahim described a range of possible arguments against tech companies as his office takes the lead in probing Google and, possibly, the anti-trust case against Silicon Valley's major players during a speech Tuesday. Apple. Separately, the Federal Trade Commission is overseeing inquiries into possible antitrust practices of Facebook and Amazon.

After discussing the breakup of Standard Oil in 1911, the 1982 dissolution of AT & T into the "Baby Bells" and government's successful monopoly case against Microsoft in 2001 – which argumably helped lay the foundation for the success of Google and Yahoo – Delrahim explained several arguments that could be made against the world's most powerful tech companies on the antitrust grounds

Offering Low Price or Free Services

Critics have pointed out Amazon's undeniable power in the field of American e-commerce and its foray into the world of brick-and-mortar retail, but the company's advocates note the consistently low prices it offers on a gigantic array of consumer goods.

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 The biggest players in Silicon Valley are under increasing scrutiny from the US government. Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg

The biggest players in Silicon Valley are under increasing scrutiny from the U.S. government. Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg.
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But the Delrayhim said the Justice Department takes a much broader view

"The Antitrust Division does not take a myopic Many recent calls for antitrust reform, or more radical change, have been premised on the incorrect notion that antitrust policy is only concerned with maintaining low prices, "he said in his speech at the Antitrust New Frontiers Conference. "It is well-settled, however, that competition has a price and non-price dimensions."

Besides price, "diminished quality" is a factor the Justice Department would consider

"As an example, privacy can be An important dimension of quality, by protecting competition, we can have an impact on privacy and data protection, "said Delrahim.

Exclusive Agreements

Delrahim said the Antitrust Division has a history of investigating "exclusive conduct" under Sections 1 and 2 of the Sherman Act

"[Exclusivity agreements] also can be anticompetitive, however, a dominant company uses exclusive dealing to prevent entry or diminish the ability of rivals to achieve the necessary scale, thus substantially foreclosing competition, "he said. "This is true in digital markets as well."

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The Justice Department's antitrust case against Microsoft focuses on the inclusion of its own "

" This theory is broadly applicable to other technology markets, "Delrahim adds

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Swallowing Up Competitors

Facebook and Google have gobbled up hundreds of other companies – some of them former competitors – over the last two decades. Delrahim indicated that this type of behavior could be considered anticompetitive

"It is not possible to describe here any way that a transaction may harm a competition on a digital market, but I would point out the potential for mischief if the purpose and effect of "Such circumstances may raise suspicions of antitrust divisions." [19659003] According to The New York Times, Google has acquired at least 270 companies over nearly two decades, including YouTube, which was a competitor to Google Video; Waze, which competed with Google Maps; and DoubleClick, who was the tech giant's chief advertising competitor.

Facebook has acquired 92 companies since 2007, including Instagram in 2012 and WhatsApp in 2014. The Menlo Park, Calif.

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Still, Delrahim said that acquisitions could be positive if they "combine complementary technologies or bring products and services to the market that would not have been made available to consumers otherwise."

While these investigations may take years to complete, Delrahim has made it clear that the Justice Department is taking a serious look at Silicon Valley's main players

"While antitrust is not a panacea for every policy challenge presented by the digital market , the Antitrust Division will not shrink from the critical work of investigating and challenging anticompetitive conduct and transactions where justified, "he said. "That's because competition is injured, consumers and markets lose with higher prices, lower quality, lower rate of innovation, less free speech and even lower privacy protections."

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