The US Federal Trade Commission has launched an investigation into big takeovers by Alphabet (including Google), Amazon, Apple, Facebook and Microsoft, going back to the start of 2010. The regulator said it wants to understand better whether the companies are making anti-competitive acquisitions that could fall outside the reporting requirements and what the impact may be on small tech firms.
The investigation does not have a specific law enforcement purpose, the FTC noted. It will look at deals not reported to the antitrust agencies under the Hart-Scott-Rodino Act and whether these filing thresholds need to be adapted to examine smaller takeovers. Normally any deal worth more than USD 94 million must be reported under the HSR Act to give regulators the opportunity to examine potential competition effects.
Special orders issued by the FTC require each company to identify acquisitions that were not reported to the FTC and the US Department of Justice under the HSR Act, and to provide information similar to that requested on the HSR notification form. The orders also require the companies to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment covenants not to compete. Last, the orders ask for information related to post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated.
The Commission said it wants to learn more about how small firms perform after they are acquired by large technology firms. The competition and related issues were discussed during several sessions of the FTC’s 2018 Hearings on Competition and Consumer Protection in the 21st Century, and this study is part of the follow-up from those hearings.
