Despite some very vocal protests from startups and even those in governing bodies regarding the monolithic nature at which the top five tech companies based in North America consume acquisitions, the US Federal Trade Commission has remained relatively hands-off about large technology purchases over the years.
However, that will seemingly change soon, as the FTC has just issued “Special Orders” calling for the examination of “Past Acquisitions by Large Technology Companies,” and its purview includes businesses such as Alphabet, Amazon, Apple, Facebook, Google Inc, and Microsoft.
#BREAKING: FTC to examine past acquisitions by large tech companies. Agency issues 6(b) orders to Alphabet Inc., https://t.co/Y8m6LH9M6K, Inc., Apple Inc., Facebook, Inc., Google Inc., and Microsoft Corp.: https://t.co/68bCS4BR97 1/7
— FTC (@FTC) February 11, 2020
As harrowing as it might seem for companies in the middle of mergers, the reality is that the new commission doesn’t seem to have any specific law enforcing jurisdiction, and most likely will not be overturning any current deals.
The FTC is looking into prior acquisitions that were not reported to antitrust agencies, in specific, deals that may fall under the Hart-Scott-Rodino Act.
The orders require Alphabet Inc. (including Google), Amazon.com, Inc., Apple Inc., Facebook, Inc., and Microsoft Corp. to provide information and documents on the terms, scope, structure, and purpose of transactions that each company consummated between Jan. 1, 2010 and Dec. 31, 2019.
The Commission issued these orders under Section 6(b) of the FTC Act, which authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose. The orders will help the FTC deepen its understanding of large technology firms’ acquisition activity, including how these firms report their transactions to the federal antitrust agencies, and whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and therefore do not need to be reported to the antitrust agencies.
Interestingly enough, the FTC’s new orders seem to focus specifically on unreported acquisitions between Jan. 1, 2010 and Dec. 31, 2019, to which companies such as Apple Google and Microsoft wade through several a year.
2019 was one of Microsoft’s busiest acquisition years to-date, the company spent $9.1 billion over the course of 20 acquisitions, many of which were lower profile purchases that will seemingly be reviewed under new FTC orders.
Coincidently, or perhaps placating to current and future protestors, the FTC issued the orders the same day the long-awaited $26.5 billion dollar Sprint and T-Mobile merger was announced clearing both its own and Department of Justice hurdles yesterday.