President Trump’s attorney general nominee, William Barr, is signaling he intends to focus antitrust enforcement on technology companies amid concerns that tech giants have grown too large and are stifling competition, FOX Business has learned.
The possible move into tech was signaled during Tuesday’s confirmation hearings, people close to the big technology outfits tell FOX Business, and it sparked widespread concern among these companies.
During the hearings Barr said, “I don’t think big is necessarily bad, but I think a lot of people wonder how such huge behemoths that now exist in Silicon Valley have taken shape under the nose of the antitrust enforcers. You can win that place in the marketplace without violating the antitrust laws, but I want to find out more about that dynamic.”
The new emphasis would be a significant change for the Justice Department, which has traditionally ceded most scrutiny of big tech to the Federal Trade Commission, particularly on merger review. It also underscores how companies like Facebook, Apple, Amazon and Google have grown in importance, dominating people’s lives like never before, and stoking concerns in Washington about the power of these outfits and the use and possible misuse customer data.
Barr’s views on big tech would be enforced through the antitrust division of the Justice Department (DOJ). For much of President Trump’s first two years in office, his anti-trust chief, Assistant Attorney General Makan Delrahim has focused the division on alleged monopolistic behavior arising from big telecommunications mergers, such as AT&T’s acquisition of Time Warner.
The department continues to challenge the merger in federal court. It’s unclear how Barr will view such deals, but during his confirmation hearings he said he would recuse himself from working on the DOJ’s dealings with the AT&T matter since he was a board member of Time Warner and even butted heads with Delrahim over the DOJ’s position on the merger.
Barr has no such entanglements regarding big tech, and his coming scrutiny of these companies could lead to more volatility in their share prices. Until recently the so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) were some of the market’s hottest stocks and are heavily embedded in most major market indices.
One area of possible concern involves the size of Facebook, Google and Amazon because these tech conglomerates have grown tremendously in size and may possibly be creating monopolies on big data and stifling competition simply by snapping up smaller outfits without any pushback from regulators, according to people with knowledge of the matter.
For instance, Facebook had almost no antitrust review when it bought WhatsApp and Instagram, relatively unknown companies at the time that have since become Facebook’s most important products. Likewise Google’s purchase of YouTube in 2006 passed through the antitrust division with ease.
Barr’s scrutiny of Facebook and Google may make it difficult for these companies to grow through further acquisitions, people close to those companies tell FOX Business.
If Barr pushes his crackdown on Big Tech, it is unclear whether he will take immediate action against these outfits or whether he will focus on preventing their growth through additional deals.
Facebook and Google are also facing the possibility of increased regulation from Democrats who have gone after tech companies over privacy concerns and data breaches. As FOX Business has reported, Democrats in Congress are discussing possible hearings on tech companies and their alleged misuse of customer data that they sell to third parties as part of their lucrative business models.
Facebook, Amazon and Google declined comment. A spokesman for the DOJ’s antitrust division didn’t return a call for comment.
For now, it looks like one tech giant, Apple, will likely escape notice from both the DOJ and Congress, people with knowledge of the matter tell FOX Business. The company, with a market cap of over $700 billion, is regarded as a “closed system” since it doesn’t rely on selling its data to other outfits.
Barr, who previously served as attorney general under Pres. George H.W. Bush, is taking a much keener interest in antitrust issues than his predecessor, Jeff Sessions, who aside from antitrust concerns in the telecom sector was primarily concerned with immigration and border security. Barr is an expert in corporate litigation and enforcement — he worked for years in the private sector both as a corporate lawyer and general counsel of Verizon Communications.
Barr’s hearings before the Senate Judiciary Committee concluded Wednesday. He is expected to be confirmed for the attorney general position.