Home / Business / DOJ antitrust manager warns Big Tech that low prices or free products will not protect them

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



Deputy Attorney General of the Ministry of Justice highlighted the antitrust case against Silicon Valley's major players during a Tuesday speech.

Makan Delrahim described a number of possible arguments against technical companies that his office leads the management to investigate Google and, perhaps, Apple. Separately, the Federal Trade Commission deals with requests for possible antitrust practices by Facebook and Amazon.

Following the discussion on the disintegration of Standard Oil in 1911, in 1982, AT & T disbanded in "Baby Bells" and the government's successful monopoly case against Microsoft in 2001 – which most likely helped to underpin the success of Google and Yahoo ̵

1; explained Delrahim several arguments that could be made against the world's most powerful technology companies in the antitrust field.

Offering Low Prices or Free Services

Critics have pointed out Amazon's indisputable power in US e-commerce and its counterfeiting in the world of brick and mortar, but the company's defenders note the consistently low prices offered on a gigantic supply of consumer goods. In addition, Facebook and Google offer a wide range of services for free.

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  The largest players in Silicon Valley are increasingly reviewed by the US government. Apple CEO Tim Cook, Amazon CEO Jeff Bezos, Google CEO Sundar Pichai and Facebook CEO Mark Zuckerberg.

The largest 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.
(Fox News)

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But Delrahim said the Justice Department is taking a much broader picture.

"The antitrust division does not take a myopic Many new demands for antitrust reform or more radical changes are associated with the erroneous notion that antitrust policy is only about keeping prices low," he said in his speech at the Antitrust New Frontiers conference. determined that competition has price and non-price dimensions. "

In addition to price," reduced quality "is a factor that the Justice Department would consider.

" As an example, privacy can be an important dimension of quality. By protecting competition, we can influence privacy and data protection. In addition, two companies can compete for extending privacy protection for products or services, or for greater openness and freedom of expression on platforms, says Delrahim.

Exclusive Agreement

Delrahim said that the antitrust division has a history of investigating "exclusive behavior" according to Sherman 1 and 2 §.

"[Exclusivity agreements] may also be anti-competitive, however, where a dominant company uses exclusive trading to prevent entry or reduce the ability of rivals to reach the necessary scale and thereby substantially shield competition", he said. "This also applies in digital markets."

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The Justice Department's antitrust case against Microsoft was partly due to the fact that its incorporation of its own browsers in its Windows operating system, which the federal agency found discouraged users from to search for alternatives.

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

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Look up competitors

Facebook and Google have gobbled up hundreds of other companies – some of them former competitors – in the last two decades. Delrahim indicates that this type of behavior can be considered anti-competitive.

"It is not possible to describe here any way that a transaction can damage competition in a digital market, but I note the potential for accidental purpose and the effect of an acquisition is to block potential competitors, protect a monopoly or otherwise "Damage competition by reducing consumer choice, increasing prices, reducing or lowering innovation or reducing quality," he said. "Such circumstances may give rise to the suspicions of the antitrust division." [19659003] According to the New York Times, Google has acquired at least 270 companies for almost two decades, including YouTube, which was a competitor of Google Video. Waze, who competed with Google Maps; and DoubleClick, who had been the tech giant's main advertising competitor.

Facebook has acquired 92 companies since 2007, including Instagram 2012 and WhatsApp 2014. Menlo Park, California based company also purchased and closed off other social networks,

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

Although these surveys may take many years to complete Delrahim made it clear that the Justice Department is serious about Silicon Valley's main players.

"Antitrust is not a paradise for every political challenge presented by the e-market, the anti-trust department will not shrink from the critical work of investigating and challenging anti-competitive behavior and transactions where it is justified," he says. where competition is damaged, consumers and markets lose higher prices, lower quality, lower level of innovation, less freedom of expression and even lower privacy. "

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