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The US Department of Justice (DOJ) announced that its antitrust division is reviewing if top online platforms are taking actions that hinder competition and hurt consumers, and it will specifically look at concerns about their practices in retail services online, search, and social media. 
Business Insider Intelligence predicted that tech giants would face antitrust regulations in its Top 10 Trends in Digital Media at the end of last year. The goal of the review is to analyze the competitive landscape of these industries, though the DOJ also intends to address any legal violations it finds.
This review is separate from recent inquiries the US Federal Trade Commission (FTC) began making into Amazon’s practices, as well as the task force it created to investigate Big Tech companies earlier this year, per The Wall Street Journal.
Amazon may be a prime target for the review given its ability to sell on its own marketplace, as well as offerings like Fulfillment by Amazon and Prime. A review could impact Amazon’s ability to continue offering and leveraging its practices, and even force the interlocking services to be broken up into separate companies, which would weaken its leading position in e-commerce.
For example, selling on a marketplace that it also controls may give Amazon an unfair advantage, considering it can access data from other sellers and use it to improve its efforts. It also offers services that could influence merchants to list on its site: Fulfillment by Amazon (FBA) provides logistics services for merchants, and reportedly offers lower fees in some cases for orders through its own marketplace compared to sales elsewhere.
Additionally, bundling a wide range of services through its Prime subscription can help Amazon inspire consumer loyalty in a way businesses focused solely on retail cannot.
The DOJ review, which has not explicitly targeted specific companies, could also lead to scrutiny and even regulation of other top technology firms’ practices in the payments and commerce space.
- For Facebook, the review could lead to even greater scrutiny of Libra, its forthcoming cryptocurrency. The recently announced initiative has already faced backlash over concerns about privacy and its potential for illegal activity. Its introduction could be slowed if new questions emerge about the implications of the social media giant control controlling Libra and leveraging its huge network to drive the crypto’s popularity.
- Apple could come under fire for having an unfair advantage as the iPhone’s sole NFC-based wallet. The review could take issue with Apple not enabling third parties to develop mobile wallets for iPhones — which they can for Android phones — by not allowing developers to access the necessary hardware. Apple has been challenged on this before in Australia and won, but the DOJ’s new review has the potential to result in regulations that even the playing field, potentially weakening Apple Pay’s position.
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See Also:
- Citi upgraded its Android mobile app with greater navigability and ease of use
- Western Union is teaming up with the UK Post Office for cross-border payments
- Capital One’s Q2 earnings gave insight into its ongoing digital transformation
Source: Business Insider – dkeyes@businessinsider.com (Daniel Keyes)