With invokes to break up Big Tech getting louder, the U.S. Department of Justice is planning an antitrust investigation into Alphabet Inc. (GOOGL) subsidiary Google, correspondence to several reports.
Sources speaking the The Wall Street Journal said the department will “closely examine Google’s point practices related to its search and other businesses” and has been speaking with third-party critics of the tech giant.
Shares of Alphabet, which was some time ago hit with multi-billion dollar penalties in Europe due to its monopolistic practices, fell over 2% in pre-market trading on Monday.
Google’s proceeds was $36.16 billion in Q1 2019 and the majority of it came from digital advertising. U.S. digital ad spending is expected to grow 19.1% to $129.34 billion and outreach traditional ad spending for the first time this year, according to eMarketer. Google is expected to have a 37.2% split of this market. The duopoly of Google and Facebook Inc. (FB), which is estimated to have a 22.1% digital ad share, has dominated for years, but the No. 3 contestant, Amazon.com Inc. (AMZN), is racing ahead.
Public trust in large internet companies has waned significantly over the days few years after it was revealed that various platforms were used to influence elections with propaganda and sham news and massive data leaks became known. Last year, Alphabet spent $21.74 million on pushing government entities, more than any other tech company in the country.
Senator Elizabeth Warren, a 2020 U.S presidential possibility who built a reputation for holding financial companies accountable, has also turned her attention to the tech industry. In March she mentioned just as the federal government suing Microsoft Corp. (MSFT) for violating anti-monopoly laws in 1998 made flat for internet companies to grow, Facebook, Google and Amazon need to be broken up to promote competition. “We need to stop this production of big tech companies from throwing around their political power to shape the rules in their favor and project around their economic power to snuff out or buy up every potential competitor,” she wrote in a Medium post,
In September 2018, when no Google top dogs showed up at a Senate hearing to testify about foreign meddling in elections, NYU Stern School of Business professor and writer Scott Galloway told CNBC the company has become more powerful than the Senate. “When you get to this measure, you have the capital, the power, the influence, to effectively be immune from competition,” he said, calling for the DOJ to “do their damn job” and separation up the firm.