Alphabet share price slide 6.1%, Facebook down 7.5% as US steps up scrutiny on Big Tech firms

Alphabet, Google’s parent company and Facebook’s shares were battered on Monday after media reports said that the United States (US) administration is reviewing the competition practices of the tech giants.

Alphabet shares sank 6.12% or US$67.76, to US$1,038.74 on Monday’s close, recording the biggest fall outside earnings since April 2011.

Facebook’s shares slid 7.51% or US$13.32, to US$164.15 while Amazon’s shares were down by 4.64% or US$82.38, to US$1,692.69.

The US Justice Department is said to be leading the probe on Google and will look into whether if the search engine portal has given preferential treatment to its own businesses in search results, while the US Federal Trade Commission will review the competition practices of Amazon and Facebook, the Wall Street Journal said.

Google and Facebook - dominant players in the online advertising space - have sophisticated tools in their systems that may create unfair competition which may disadvantage smaller players when competing for advertising dollars.

The US government would have to show evidence that the tech firms misused their monopoly dominance to harm consumers, which could be an uphill task as the tech platforms provide most of their services for free.

The move comes as more tech firms fall under scrutiny on data protection breaches and privacy concerns, amid the titan growth of tech firms in recent years.

In 2017, Google agreed to pay US$2.7 billion to the European Union over claims that it unfairly prioritized its own shopping platform in search results. This March, the firm was hit with a US$1.7 billion fine for thwarting advertising rivals.

Competitors of Google, including travel and restaurants ratings website TripAdvisor have been complaining that its users will be directed to Google's own brands when they use its search engine.