Top prosecutors from a group of US states are readying a joint investigation into whether major technology firms have breached antitrust law, the Wall Street Journal reported on Monday.
The alliance of state attorneys general could next month formally announce that they are delving into whether leading Internet firms and technology platforms have used their clout to thwart competition, the Journal reported, citing unnamed people familiar with the matter.
The US Department of Justice last month announced that it is reviewing “whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation or otherwise harmed consumers.”
Lawmakers and activists have raised concerns about the growing dominance of online giants such as Alphabet Inc’s Google, Facebook Inc and Amazon.com Inc in key segments of the digital economy.
Once seen as the darlings of Washington, Silicon Valley firms have become targets for politicians of all stripes.
US regulators last month imposed a record US$5 billion fine on Facebook for lapses in privacy and data protection, including the leaking of private data for political consultancy Cambridge Analytica.
Tech firms and their backers deny monopolistic conduct and argue that the fast-evolving digital economy has robust competition, and has led to lower prices and more choice for consumers.
Separately, Amazon, Facebook and Google on Monday joined forces to decry the French digital tax as retroactive and discriminatory.
US President Donald Trump is considering retaliating against the tax — approved on July 11 — with punitive tariffs on French wine imports, prompting an investigation by the Office of the US Trade Representative (USTR).
The companies appeared at a USTR hearing on possible countermeasures and were unanimous in their complaints, calling the tax a “troubling precedent.”
The tax, which Washington considers unfair, adds yet another bone of contention to the transatlantic trade disputes that also include steel, aluminum, automobiles, aircraft and agriculture.
The proposed 3 percent tax on total annual revenues of companies that provide services to French consumers applies only to the largest tech companies, which are mostly US-based.
For Amazon, where France represents the second-largest European market for e-commerce, the levy “creates a double taxation,” Amazon director of tax planning Peter Hiltz said.
About 58 percent of Amazon’s sales are through partner companies, which stand to take the hit.
The tax “negatively impacts Amazon and thousands of small and medium businesses,” Hiltz said.
“Amazon cannot absorb the expenses,” he added. “[The company] already informed partners that their fee will increase starting Oct. 1.”
The tax would apply to about 30 companies with at least US$28 million in sales in France and US$831 million worldwide, but it does not apply to other Internet operators such as media companies.
The tax touches “a handful of Internet business when every sector is becoming digital,” Google public policy manager Nicholas Bramble said at the hearing.
Taxing only this part of the industry “doesn’t make sense,” he added.
The companies also complained that the tax is retroactive, since it would apply from the beginning of this year — something they have “never seen” before, Alan Lee of Facebook said.
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