Several tech powerhouses, led by Facebook and Google, took a beating on Wall Street on Monday amid concerns U.S. regulators are looking into anticompetitive practices among Silicon Valley’s top companies.
Facebook shares dropped 7.5% on the day, closing at $164.15 after The Wall Street Journal reported the Federal Trade Commission is leading an antitrust investigation into whether the social network has stifled competition. The company has already been under regulatory scrutiny from the FTC, with Facebook reporting in April it expects to be fined up to $5 billion for violating an existing agreement over its handling of user data.
Alphabet, the parent company of Google, was similarly hit, with shares falling more than 6 percent to about $1,039 per share — its lowest point since January. This was the first trading session since the WSJ reported the Department of Justice was weighing its own antitrust investigation into the search giant.
The FTC and DOJ, which typically coordinate which organization will handle particular cases, look to be dividing up investigations of the major tech firms: Apple shares slumped 1% after Reuters reported the DOJ was granted the authority to launch an antitrust probe against the company. The news came at the same time Apple was hosting its annual Worldwide Developer Conference in San Jose, California, where it unveiled several new features and tools. Amazon, meanwhile, dropped nearly 5% to $1,692 per share after the FTC was given the green light to look into its practices.
The specter of U.S. regulation comes after Silicon Valley has run into criticism from politicians at home and abroad in the last year. The European Union adopted new data privacy laws last summer, and 2020 presidential hopeful Elizabeth Warren made news earlier this year with her call to break up companies like Facebook and Amazon.
U.S. lawmakers, to this point, have been wary of taking action against companies like Facebook and Twitter, despite calling executives to testify on a myriad of concerns, including the proliferation of fake news. That might be changing, however, after the House Judiciary Committee said Monday afternoon it would open an investigation into tech competition and enforcement policies.
“The open internet has delivered enormous benefits to Americans,” Judiciary Committee Chairman Jerrold Nadler, a Democrat from New York, said according to the WSJ. “But there is growing evidence that a handful of gatekeepers have come to capture control over key arteries of online commerce, content and communications.”
Facebook chief Mark Zuckerberg recently pushed back against calls to spin-off Instagram and WhatsApp from the company, saying it would “make it much harder” to solve the company’s issues if it wasn’t so tightly connected. Antitrust experts told TheWrap last month that despite increased scrutiny from regulators and lawmakers, the likelihood is low that Facebook has violated any anti-competition laws.