FTC looks into M&A deals by Big Five Tech
The US Federal Trade Commission (FTC) hase issued special orders to five big tech firms – Alphabet (including Google), Amazon, Apple, Facebook and Microsoft – “requiring them to provide information about prior acquisitions not reported to antitrust agencies under the Hart-Scott-Rodino (HSR) Act.”
These special orders would now require these tech companies to report about each transaction involving companies that fall below HSR filing thresholds.
This means smaller deals will now have to be reported in the same way as larger deals, and would likely have to include 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.
Besides this, orders ask for information related to post-acquisition product development and pricing, as well as how acquired assets were integrated and how data has been treated, if they were acquired in the first place.
Why is this happening?
A Techcrunch report had observed that companies like Apple have developed special stock statement where in the event that they do admit to having made an acquisition, they would also note, “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose and plans.”
The FTC notice had stated the orders would help the FTC deepen its understanding of large tech firms’ acquisition activity, as well as how they report transactions to federal antitrust agencies.
There was also the element of potentially anticompetitive acquisitions of nascent or potential competitors that the FTC wanted to address.
“Digital technology companies are a big part of the economy and our daily lives,” FTC Chairman Joe Simons said in a statement. “This initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive, for the benefit of consumers.”