Author: Lindsey Boycott
Estimated read time: 3 minutes
Publication date: 5th Jun 2019 10:22 GMT+1
The tech-inclined Nasdaq composite ped 1.6 percent over the course of a day at beginning of June after antitrust concerns were raised against some of the world’s biggest tech companies. Stocks in Alphabet, Amazon, Facebook and Apple dragged down the market after the Wall Street Journal broke the story about the US government’s intent to investigate Alphabet-owned Google.
Further details regarding the addition of Facebook to the list of big tech firms on the block came after the House of Representatives (HoR) announced their intent to launch a large-scale investigation into the internet companies on June 3. Alphabet’s shares dipped 6.1 percent after Monday’s market opened and Facebook’s followed suite with 7.5 percent shortly thereafter.
Both the Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly manage the task of overseeing antitrust laws and according to two sources cited by multiple publications, the DOJ is reported to be investigating the antitrust allegations against Google and Apple while the FTC will explore the matter of a monopoly with Facebook and Amazon.
“The internet is broken,” Rep. David Cicilline, leader of the HoR’s antitrust investigation, said in an NPR interview. “The problem we are hoping to address is the enormous dominance of large technology platforms in the digital marketplace.”
It was a hard June-start for the communications services, consumer discretionary and tech sectors as they were all the bottom-of-the-barrel performers in the S&P 500 that first Monday. Communications ped more than 2.5 percent, its largest one-day decline since late October, while consumer and tech fell one percent lower.
“The tech industry has come into its own in recent years, the best of the up-and-coming companies went on to became the biggest as competition fell away. Google, Amazon, Apple, and Facebook acquired billions of members, bought-up other businesses and made inroads into new markets.
Facebook acquired Instagram and WhatsApp without an authority’s second look Amazon undercut smaller online retailers with dramatic, and temporary, price s of their own and Google asserted their dominance by ensuring their own affiliate marketing links were placed above their competitors’ advertisements in user searches.
“There hasn’t been a full investigation – an antitrust investigation like this in more than 50 years,” Cicilline said. “[T]his is an opportunity to really look at, what is the impact on innovation what is the impact on entrepreneurship, on competition and goods and services that consumers are purchasing?”
Disclaimer: Lindsey Boycott is an experienced financial consultant who writes for Finscreener.com. The observations she makes are her own and are not intended as investment or trading advice.