UPDATED with news of House committee probe. The Democrat-controlled House Judiciary Committee plans to investigate giant tech companies, a development that follows reports over the weekend that Google and Amazon are about to get closer regulatory scrutiny.
The committee promises a “bipartisan look at competition in the digital markets,” according to a statement by House Judiciary ranking member Doug Collins (R-Ga.) Democratic committee leaders will steer the process.
Shares in Amazon and Google parent Alphabet declined Monday after reports over the weekend suggested both tech giants are about to face U.S. regulatory scrutiny after years of objections from rivals and politicians.
Alphabet fell more than 6%, to $1,036.23 and has now surrendered all of its gains in 2019 to date as investors appeared to question the relative value of a company burdened by more layers of regulation. Amazon gave up nearly 5% to finish at $1,692.69, the stock’s lowest level since March 15.
Reports in the Washington Post and The New York Times over the weekend indicated that the Federal Trade Commission and Department of Justice are looking closer at Amazon and Google. The two have reportedly agreed to divide up the task, with the DOJ focused on Google and the FTC taking on Amazon. The news accounts came from unidentified sources, and both agencies have declined to comment, but Wall Street is clearly registering a reaction. The FTC has already established an antitrust task force with a focus on the large tech companies, while European regulators fined Google $1.7 billion in March over anti-trust complaints related to advertising.
Politicians on both sides of the aisle have made breaking up tech giants a key part of their platforms. Democratic presidential candidates Elizabeth Warren and Bernie Sanders have advocated for a breakup. Meanwhile, Republicans (including President Donald Trump) have maintained that Google’s algorithmic search results are biased against right-leaning content. Google also casts a long shadow in online advertising, with critics and rivals wondering if its ability to tie ad revenue to search results offers it an anti-competitive edge.
Facebook stock also declined 7.5% Monday, to $164.15 a share. The social media giant has spent the past several months in the crosshairs over its data practices and the role its platform has played in recent elections, among other concerns. Founder and CEO Mark Zuckerberg, during Congressional testimony a few months ago and in other remarks since then, expressed an openness to the idea of being regulated.