State attorneys general around the country are gearing up to launch an antitrust investigation into Silicon Valley’s biggest players, according to the Wall Street Journal. While the tech giants have not been directly named, Facebook, Amazon, Alphabet and Apple already face similar probes by other government entities.
Regulators and lawmakers have raised concerns that the four tech giants use their power to shut down competition. The states’ investigation would be the third probe into the industry. Last month, the U.S. Justice Department announced an official antitrust investigation of the four companies. Separately, the Federal Trade Commission opened an investigation into Facebook over its consumer privacy practices.
Loup Ventures Managing Partner Gene Munster told Yahoo Finance’s On the Move that any regulation would have a larger impact than expected on consumers, one that may not be good for consumers.
“I think when people hear their data, they actually think that this data that is valuable to themselves, when in fact, it's probably more valuable to advertisers,” he said. “There's going to be a cost to consumers to give this up, and I do question, at the end of the day, if consumers actually want this.”
What will happen, according to Munster, is functionality of some products will be diluted while some products may just go away, so the result of all these probes may not be beneficial to consumers.
“There is going to be more red tape that some of these companies are going to have to go through, and ultimately, you're probably going to see some changes to how they can share data, or at least some of the notifications around how your data is being shared,” said Munster.
Facebook is the most vulnerable, then Google
Facebook faces ongoing questions about how they share and notify people of how they use data, while Google’s biggest issue is that they use their search dominance to benefit other products, said Munster. He added that Apple is the least risk but it will get targeted “just because they’re a large tech company, but they will have by far the least risk.”
The FTC and DOJ began their scrutiny of the tech giants after lawmakers in Washington urged for more regulation of the companies. Senator Elizabeth Warren, a 2020 presidential hopeful, has targeted the tech industry multiple times, calling for each company to be broken up. Just last week, FTC Chair Joe Simon said he is willing to break up big tech if he has to.
“Breaking these companies up is ultimately not in the best interests of consumers,” Munster said. “These companies will not be broken up— I don't think that that will actually come to fruition.”
Valentina Caval is a Producer at Yahoo Finance.