The past several decades have brought unprecedented growth for technology companies. Many of the biggest tech companies, including (AMZN -2.99%), Facebook (META -5.61%), and Google parent Alphabet (GOOGL -5.04%) (GOOG -5.03%), have only come into existence in the past 25 years, and others, including Apple (AAPL -2.88%), have developed revolutionary products that redefined their fortunes.

The two U.S. federal agencies that share antitrust authority, the Federal Trade Commission (FTC) and the Department of Justice (DOJ), have reportedly been negotiating to decide which body will carry out investigations into each of the large U.S. technology companies.

If true, these reports seem to signal an environment that will be increasingly hostile for the tech giants and potentially worrisome for investors.

antitrust law book and courtroom props

Image source: Getty Images

Heading off turf wars

Over the past week, reports have emerged that indicate the two regulatory bodies are working out jurisdictional issues regarding each of the big tech companies, as a precursor to antitrust investigations. The DOJ and the FTC are said to be laying the groundwork in advance of launching probes, by cooperating with each other to stave off territorial disputes once the investigations are under way.

This coordinated effort shows the government regulators are serious about inquiries into what they view as potential anticompetitive practices by big tech.

A flurry of reports

The DOJ is on the verge of launching a probe into Google, according to a report that first appeared in The Wall Street Journal and has since been independently verified by other a host of other news outlets. The investigation would examine various business practices related to "search and other businesses," according to the report. 

Apple could also be the subject of a DOJ antitrust investigation, according to a report from Reuters. The agency is said to have secured jurisdictional authority to review whether Apple has an unfair competitive advantage. Last month, the U.S. Supreme Court let continue an antitrust lawsuit from iPhone users alleging that Apple overcharged for apps sold in its App Store. European Union regulators have also asked Apple to address similar charges from Spotify. 

Dominion over Amazon has reportedly been ceded to the FTC, though none of the reports has yet suggested that a probe is imminent. However, The Washington Post suggests this "kind of arrangement brokered between the Justice Department and the FTC typically presages more serious antitrust scrutiny." Amazon does seem a likely target, since the company accounted for nearly of all e-commerce sales in the U.S. last year. 

The FTC has reportedly secured jurisdiction to begin a potential investigation into whether Facebook "has engaged in unlawful monopolistic practices," according to a report in The Wall Street Journal on Monday. The agency has already been reviewing Facebook's data practices for more than a year, so the latest intergovernmental agreement suggests the agency may be planning an even more in-depth probe. 

Facebook has been bracing for a record fine from the FTC over its seeming inability to safeguard user data. As part of its first-quarter earnings report, the company said it was setting aside a whopping $3 billion in anticipation of a fine regarding user data policies.

What does this mean for investors?

Neither of the federal agencies nor any of the companies in question have commented on the media reports, all of which cited unnamed sources and "people familiar with the matter." All of the reports were also careful to point out that the decision over jurisdiction doesn't necessarily mean that any official investigations have been -- or will be -- initiated.

That said, this does appear to be a coordinated effort among the two antitrust regulators to clear the way for greater scrutiny. Complying with the investigations and defending against any potential allegations would be costly, and any findings of anticompetitive behavior would be a net negative for the companies -- and their investors. The reports alone caused Amazon, Apple, Alphabet and Facebook shares to fall 4.6%, 1%, 6%, and 7.5%, respectively, in the wake of the reports.

Things could get much worse.