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Big Tech Shares Slide as Prospect of Antitrust Scrutiny Mounts
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Big Tech Shares Slide as Prospect of Antitrust Scrutiny Mounts

Published by
New York Times
on
May 30th, 2019

Google, Amazon, Facebook and Apple were all lower, following reports that the tech giants are facing greater scrutiny from antitrust regulators in the Justice Department and Federal Trade Commission.

Technology stocks tumbled on Monday, as declines in the biggest companies in the sector punctuated an otherwise quiet day on Wall Street.

Google, Amazon, Facebook and Apple were all lower, following reports that the tech giants are facing greater scrutiny from antitrust regulators in the Justice Department and Federal Trade Commission. The technology-heavy Nasdaq index fell by 1.6 percent, bringing its decline from an early May record to 10 percent.

Regulators appear to be splitting up oversight of the four companies. The Justice Department is exploring an investigation of Google’s advertising and search business, and will oversee antitrust complaints over Apple. The F.T.C. will look into anticompetitive practices at Amazon and Facebook.

The delegation of responsibility does not mean that official investigations have been opened, or will be.

Still, investors reacted to the reports by dumping shares of all four companies. Shares of Facebook fell more than 7 percent, while Google’s parent, Alphabet, fell by about 6 percent. Amazon was down 4.6 percent, while Apple was 1 percent lower.

The F.T.C. in February said that it was creating an antitrust task force to look at the tech industry. It is also negotiating with Facebook over a fine for violating a 2011 privacy settlement, which could be as high as $5 billion.

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But the addition of the Justice Department to antitrust oversight points to American regulators’ growing unease with the clout wielded by a handful of Silicon Valley businesses.

The broader S&P 500 index was down slightly, but

investors remained watchful of developments on the trade front, after stocks suffered their sharpest monthly decline this year in May with a 6.6 percent drop. That nervousness lingered in the bond market Monday, with the yield on 10-year Treasury bonds falling, suggesting that investors increasingly believe trade tensions could hinder world economic growth.

On Sunday, China issued a defiant note with a white paper blaming the United States for starting the trade war between the two countries, suggesting that breaking the impasse will be difficult. Two days earlier, the Chinese government threatened to put American companies and individuals on a blacklist if they stopped supplying their Chinese partners.

But stocks were bolstered in part by rising expectations that the Federal Reserve could start cutting interest rates in response to the rising trade tensions. In a prepared statement, St. Louis Federal Reserve President James Bullard on Monday said lower Fed rates “may be warranted soon.”

© New York Times

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