Investors have "pummelled" technology stocks, says The New York Times. Facebook shares fell by more than 7% last Monday, while Google and Amazon shares were also sharply lower. US regulators are reportedly "divvying up antitrust oversight of the Silicon Valley giants", with the Justice Department agreeing "to handle potential antitrust investigations related to Apple and Google, while the Federal Trade Commission will take on Facebook and Amazon". At the same time, lawmakers are investigating "whether they have stifled competition and hurt consumers", and are even considering updating antitrust laws "to keep up with an industry that didn't exist when antitrust laws were written".
It's "hard to deny" that the big tech companies enjoy a huge degree of market power, say Robert Cyran and Gina Chon on Breakingviews. For example, Amazon "controls about half of the US e-commerce market" while Alphabet dominates internet advertising thanks to a 95% share of mobile search. An antitrust investigation is a "no brainer". Still, the agencies will "struggle to prove that consumers are being harmed by their huge scale" especially since Internet users are "lavished with free services" by Google, while Amazon provides "countless products at generally low prices". After all, a previous investigation into Google "ended with a whimper" in 2013.
Regulators "would do well to remember that past crackdowns on tech behemoths have come only after good old competition did their job for them" says Dan Gallagher in The Wall Street Journal. For example, Google, and its parent company Alphabet, "is showing on its own that it is far from invincible". For instance, its search dominance has failed to translate into other markets, such as smartphones, where Google Pixel has a mere 1% share.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Is the tech sector's time up?
-
Pension warning: one in five don’t know how much is going into their pensionHow to check your pension contributions and why it matters
-
50,000 power of attorney applications rejected – how to avoid common mistakesA freedom of information request shows that thousands of lasting power of attorney (LPA) applications are rejected due to errors. We explain how to avoid mistakes and reveal tips to make the process as straightforward as possible
