NEW YORK/SAN FRANCISCO - At some point, antitrust investigations of Google and Amazon.com become a no-brainer. As a step in that direction, the Federal Trade Commission and Justice Department, which police U.S. competition issues, have divvied up responsibility for the tech giants, according to news reports. That could create ammo for future fights. Facebook ought to worry too.

Detractors of tech giants often struggle to prove consumers are being harmed by their huge scale. On the contrary, internet users are lavished with free services by Google and its $719 billion parent Alphabet, and countless products at generally low prices by the $836 billion Amazon. A previous FTC investigation into whether Google unfairly favored its own offerings ended with a whimper in 2013. Facebook already expects to be fined around $5 billion by the FTC for privacy issues, but that is tiny for a company with a market capitalization of $470 billion.

Tech companies are shielded in part by their markets being new, ill-defined and often discretionary. Yet their dominance is hard to deny. Amazon controls about half of the U.S. e-commerce market, eMarketer estimates, and its share of all retail is steadily rising. Alphabet dominates internet advertising thanks to a 95% share of mobile search, according to StatCounter. Facebook has nearly 2.4 billion global monthly active users.

Splitting jurisdiction between the FTC and DOJ – which have overlapping remits – is a logical way to clear the decks. It avoids overloading one agency, duplication of work, and bureaucratic infighting. It will also leave each to explore different approaches to big questions like how troves of data on users and suppliers affects competition – something on which regulators worldwide are feeling their way.

Politics also raises the stakes, notably at the DOJ, which was already scrutinizing social media firms for alleged bias against conservatives after pressure from President Donald Trump. Antitrust scrutiny of Google has been informed partly by competitors’ complaints, including those by Oracle, whose Co-Chief Executive Safra Catz served on Trump’s transition team.

In the past, U.S. regulators have failed to make a dent on Google and software giant Microsoft, and they may achieve little again. These investigations could, however, establish important precedents that, a few years from now, inform more dramatic skirmishes.

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CONTEXT NEWS

  • The U.S. Department of Justice is preparing an investigation into whether Google, the search engine owned by Alphabet, broke antitrust law in operating its online businesses, Reuters reported on May 31.
  • Amazon.com, the online retailer, is coming under closer watch of the Federal Trade Commission, the Washington Post said on June 1 citing sources. The article did not suggest that an investigation of Amazon was underway.
  • The FTC started an investigation of whether Google engaged in anti-competitive behavior in 2011, and settled two years later when Google agreed to change its business practices. Antitrust issues are policed by both the FTC and the DOJ, often depending on which sector is at issue.
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(The authors are Reuters Breakingviews columnists. The opinions expressed are their own.)

(Editing by John Foley and Amanda Gomez)

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