GOOG Alphabet Inc

By Ryan Tracy 

WASHINGTON -- Concerns about the power of Big Tech echoed across the capital on Tuesday, with politicians in both parties demanding more regulatory scrutiny of four giant companies' reach and their plans for expansion.

In three hearings, which were focused on Facebook Inc.'s cryptocurrency plans, alleged Google censorship, as well as on an antitrust examination of Facebook, Google, its owner Alphabet Inc., Amazon.com Inc. and Apple Inc., the companies took punches on a range of political and policy issues.

"In an effort to promote and continue this new economy, Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight," said House Antitrust Subcommittee Chairman David Cicilline (D., R.I.) at the outset of a hearing featuring executives from the four U.S. tech giants. "But as a result, the internet has become increasingly concentrated, less open and growingly hostile to innovation and entrepreneurship."

In their testimony, the companies said that they still face competition in markets from advertising to apps, and that their online platforms have facilitated the growth of many other smaller companies.

"We have helped reduce prices and expand choice for consumers and merchants in the U.S. and around the world," said Adam Cohen, Google's director of economic policy.

Mr. Cicilline's hearing raises the prospect of Big Tech's worst fear: Actions to break them up or fundamentally restrict their business models.

That threat hasn't materialized yet, and may not for years, if ever. The Justice Department and the Federal Trade Commission have privately divvied up jurisdiction for potential antitrust probes of the four companies, with the Justice Department preparing for an investigation of Google, The Wall Street Journal has reported. Those probes could take years to unfold.

Major legislation on privacy, antitrust or other tech-related issues also doesn't appear likely to pass a divided Congress before the 2020 elections.

Opponents of the companies nevertheless hope criticism from Capitol Hill could lend political backing to regulators who may want to rein in the companies' power -- much the way analysts credit congressional scrutiny for helping to fuel the successful U.S. antitrust case against Microsoft Corp. in the 1990s.

Growing scrutiny of Silicon Valley is extending beyond antitrust probes to hit the companies' reputation and their plans to extend their reach, particularly for Google and Facebook.

In the past week, President Trump invited critics of Facebook and Google's YouTube to the White House and promised he would explore regulatory solutions to maintain free speech on social media.

Mr. Trump separately said Tuesday that his administration should look into Google's ties to the Chinese government, elevating the political risk of the search giant's yearslong effort to build a presence in that huge market.

Separately, YouTube faces an FTC investigation over allegations that it has improperly gathered data on minors, prompting the online-video giant to weigh changes to how it handles content for children.

Facebook will face a $5 billion FTC fine for violations of its privacy promises, the Journal reported last week -- an action that is expected to come with ongoing scrutiny of the company's privacy practices.

Also under the microscope: Facebook's plan to launch the payments-enabling cryptocurrency Libra as soon as next year. "I think we're going to take more time than that," Federal Reserve Chairman Jerome Powell said of Facebook's timeline in a July 11 hearing. David Marcus, the Facebook executive in charge of the project, said later Tuesday that Libra wouldn't launch until regulators' concerns are addressed.

Republicans appeared more resistant to crack down on the companies. In response to attacks on Facebook in the hearing on its cryptocurrency, Sen. Pat Toomey (R., Penn.) warned against "strangl[ing] this baby in the crib."

Rep. James Sensenbrenner (R., Wis.), the House Antitrust Subocmmittee's top Republican, told colleagues: "Just because a business is big doesn't mean it's bad."

Write to Ryan Tracy at ryan.tracy@wsj.com

(END) Dow Jones Newswires

July 16, 2019 17:30 ET (21:30 GMT)

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