Facebook founder and CEO Mark Zuckerberg arrives to testify following a break during a Senate Commerce, Science and Transportation Committee and Senate Judiciary Committee joint hearing about Facebook on Capitol Hill in Washington, DC.
Saul Loeb | AFP | Getty Images
Politicians and technology executives have spent well over a year debating the proper role for regulators in the tech industry, which has assumed outsized influence over the U.S. economy.
Monday was the day that the chatter turned to early stages of action, and the market punished big tech.
Investors were most concerned about Facebook and Google parent Alphabet on Monday, sending shares of each down more than 6%. Amazon dropped more than 5% and Apple slid more than 1%. In total, they lost over $130 billion in market value and led a 1.5% slump in the Nasdaq Composite, sending the tech-heavy index into correction territory — down more than 10% off its record high set in April.
Following reports late Friday that the Justice Department is preparing an antitrust probe of Google, Reuters reported on Monday that the same department has been given jurisdiction over Apple’s practices as part of a broader review into the behavior of tech companies.
Meanwhile, the Federal Trade Commission has reportedly assumed oversight of Amazon and Facebook in looking at how those companies could potentially be harming competition.
The probes are at their early stages, based on the published accounts, so no significant fines, forced company breakups or changes in business practices are expected anytime soon.
But in assuming greater oversight over four of the world’s five most valuable companies (Microsoft has the biggest market cap), regulators are suggesting that the days of unfettered growth for the tech industry may be numbered.
In a report on Thursday about risks facing Amazon, D.A. Davidson analysts highlighted “the potential for antitrust and regulation across the globe” as a hurdle for future expansion. The U.S. represents only the latest concern.
“Additionally, foreign governments are also realizing the dangers of allowing a few tech titans to have such enormous influence on consumer’s day-to-day lives, including not only Amazon, but also Apple, Facebook, and Google and the potential for regulatory disruption is increasing by the day, in our view, and, therefore, is something we are monitoring closely,” the report said.
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