Shares in the tech giants have fallen dramatically after the US government announced it would be investigating them for anti-competitive practices.

Stock in Facebook, Amazon and Google parent Alphabet opened down more than 1 percent on Wednesday morning, following word of the investigation.

On Tuesday, the U.S. Department of Justice opened a sweeping antitrust investigation of major technology companies and whether their online platforms have hurt competition, suppressed innovation or otherwise harmed consumers.

It said the probe will take into account 'widespread concerns' about social media, search engines and online retail services.

Facebook shares plunged on Wednesday on word of a sweeping antitrust probe

Facebook CEO Mark Zuckerberg is seen above. Shares in that company, Google, and Amazon all dropped after the DoJ announced an antitrust investigation into big tech

'The Department's antitrust division is reviewing whether and how market-leading online platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers,' the Justice Department announced.

'The goal of the Department's review is to assess the competitive conditions in the online marketplace in an objective and fair-minded manner and to ensure Americans have access to free markets in which companies compete on the merits to provide services that users want,' the announcement concluded.

'If violations of law are identified, the Department will proceed appropriately to seek redress.'

It comes as a growing number of lawmakers have called for stricter regulation or even breaking up of the big tech companies, which have come under intense scrutiny following a series of scandals that compromised users' privacy.

President Donald Trump also has relentlessly criticized the big tech companies by name in recent months. He frequently asserts, without evidence, that companies such as Facebook and Google are biased against him and conservative politicians.

The Justice Department did not identify specific companies but said the review would consider concerns raised about 'search, social media, and some retail services online' - an apparent reference to Google, Facebook and Amazon.

Meanwhile, the Federal Trade Commission is poised announce the terms of its settlement with Facebook amid allegations that the social media giant mishandled its users' private information.

According to two people briefed on the matter, Facebook has agreed to pay $5 billion and create a board committee on privacy.

As part of the settlement, Facebook will also agree to new executive certifications that users' privacy is being properly protected, the sources said.

The Washington Post reported on Tuesday that the FTC will allege Facebook misled users about its handling of their phone numbers and its use of two-factor authentication, citing two people familiar with the matter.

The Post also reported the FTC also plans to allege Facebook provided insufficient information to about 30 million users about a facial recognition tool, an issue identified earlier by Consumer Reports.

Two people briefed on the matter confirmed the Post report the FTC will not require Facebook to admit guilt as part of the settlement.

The settlement will need to be approved by a federal judge and will contain other significant allegations of privacy lapses, the people said.

The fine will mark the largest civil penalty ever paid to the FTC.

The FTC and Facebook declined to comment.