FTC Issues Special Order To Review Acquisition Of Big Tech Companies
The Federal Trade Commission (FTC) has in a press release said that it will be reviewing acquisitions made by large tech companies. The commission voted 5-0 to issue special orders to review the past mergers and acquisitions by big tech superpowers.
It will review companies like Alphabet, Amazon, Apple, Facebook, and Microsoft.
The FTC is interested in deals that took place from 1st January 2010 and 31st December 2019. The special order will be “requiring them to provide information about prior acquisitions not reported to the antitrust agencies under the Hart-Scott-Rodino (HSR) Act”.
The FTC says the orders will help the FTC deepen its understanding of large technology firms’ acquisition activity. This is if the firms report their transactions to the federal antitrust agencies.
It will also help them understand if “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”.
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The FTC website states that it requires companies to submit merger and acquisition proposals. Especially if they exceed a certain amount for review by the FTC and Department of Justice.
The threshold used to be if the deal is valued at more than $90 million. However, there are some exceptions and the threshold has changed over time.
The FTC Chairman Joe Simons said:
“Digital technology companies are a big part of the economy and our daily lives. 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.”
This special order, however, will involve reviewing these deals below the threshold. There’s is the tendency for these deals to draw less attention and not make the headlines. Especially as they are not major acquisitions.
CEO Tim Cook had previously admitted to acquiring a company every two or three weeks on average. However, Apple doesn’t “primarily [go] looking for talent and intellectual property.”
The FTC is also ordering the companies to reveal 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 will also be looked into.
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