The Federal Trade Commission announced the creation of a new task force that is dedicated to monitoring competition in the U.S. technology industry. This Technology Task Force will coordinate and consult with 17 staff attorneys throughout the FTC who have experience in complex product and service markets, including the markets for online advertising, social networking, mobile operating systems and apps, and platform businesses. In addition to examining industry practices and conducting law enforcement investigations, these staff attorneys will be charged with investigating “technology-related sectors of the economy.” This mandate is intentionally overbroad and designed to grant wide-ranging authority to examine industry behavior, including the review of both prospective mergers and consummated technology mergers.
According to the Commission, “[t]echnology markets, which are rapidly evolving and touch so many other sectors of the economy, raise distinct challenges for antitrust enforcement. By centralizing our expertise and attention, the new task force will be able to focus on these markets exclusively – ensuring they are operating pursuant to the antitrust laws, and taking action where they are not.” In the same press release, Bureau of Competition Director Bruce Hoffman commented that the Technology Task Force was set up to focus on competition issues, not consumer protection problems. That said, to the extent hot-button issues such as data and consumer privacy are believed to affect competition, the FTC will delegate authority to the task force to explore the quasi-related issue and mandate corresponding remediation actions.
The creation of this task force comes as Silicon Valley’s tech giants face additional scrutiny for their size and market power. Earlier this month, for instance, the German antitrust office (Bundeskartellamt) ruled that Facebook’s use of services such as WhatsApp, Instagram, and Facebook Analytics to collect data on user behavior while away from the main site is illegal and should be prohibited for the sake of fair competition among tech companies. Similarly, the Australian Competition and Consumer Commission (ACCC) has confirmed that it is investigating the “misuse of market power” by tech giants Google and Facebook. The ACCC inquiry’s preliminary findings report highlights the substantial market power of the two companies and calls into question the validity of information that is available on their respective platforms.
Likewise, last month, it was reported that FTC officials are negotiating a multibillion-dollar fine against Facebook for the social media giant’s alleged privacy lapses. This announcement comes as consumer advocates and academics have begun to pressure U.S. regulatory agencies to aggressively enforce antitrust laws against large tech companies, and even to consider breaking up Facebook by forcing it to divest itself of WhatsApp and Instagram. According to a coalition of advocacy groups, “the companies should be reestablished as independent entities and Facebook should be required to disgorge the personal data unlawfully acquired from those firms.” The groups argued that Facebook is too big for it to adequately safeguard user data for all three major apps.
The Technology Task Force is part of a growing global trend toward jurisdictions creating tech-specific investigative teams, which has led to high-profile sectoral inquiries in Europe (Digital Single Market), the UK (Competition in the Digital Economy and Disinformation and “Fake News”), Australia (Digital Platforms Inquiry) and Germany (sector inquiry into online advertising). This movement will likely continue as global regulators seek to understand and address the economic power of large technology firms.
To learn more about the Technology Task Force, click here.