Investing.com Facebook and Google moved lower Monday as the threat of regulatory scrutiny by U.S. authorities, prompted investors to rein in their bullish bets on the tech heavyweights.
The Federal Trade Commission and the Department of Justice struck an agreement to step up antitrust regulations, with Google and Facebook fixed in the crosshairs.
Facebook (NASDAQ:FB) fell 7% and Google parent Alphabet (NASDAQ:GOOGL) lost 6%.
Under the agreement, the FTC will reportedly be able to examine the effect of the Facebook's practices on digital competition, The Wall Street Journal reported.
The increased regulatory microscope on Facebook, already under investigation by the FTC over its handling of user data, comes as the company has warned that it is on the hook for a fine of up to $5 billion.
A similar deal reportedly was also struck between the two government entities concerning Google, but the Justice Department will receive jurisdiction over a potential antitrust probe. The investigation would look into Google’s search practices and other businesses, the Journal reported Friday.
U.S. authorities are somewhat behind their international counterparts when it comes to looking deeper into the practices of the tech heavyweights, with European regulators on the trail for months.
Earlier this year in March, the European Union slapped a fine that ran into the billions of dollars on Google for giving itself an illegal advantage in search, paving the way for corporates to jump on the ligation bandwagon.
Google is reportedly facing nearly $2 billion in litigation obligations, including a $565 million lawsuit by German price comparison site Idealo and more than $1 billion in lawsuits by British price comparison sites Foundem and Kelkoo, according to a report from Financial Times in April.
Facebook is up 35% year to date, while Google is up 5.89%. That compared with the S&P 500 returns of about 9% so far this year.