- The Federal Trade Commission asked Amazon, Apple, Facebook, Microsoft, and Google’s parent company for information on past acquisitions of small startups, it said in a press release Tuesday.
- The FTC is looking into whether the companies gained an unfair edge by buying up “nascent competitors” in deals small enough that companies weren’t required to report them.
- Chairman Joe Simons said there are potentially “hundreds” of deals that flew under the radar, and said the fact-finding mission could lead the FTC to unwind past deals.
- The inquiry comes amid numerous other antitrust investigations into the tech industry in both the US and Europe.
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The Federal Trade Commission is looking into past acquisitions made by major tech companies, the agency announced in a press release Tuesday.
The FTC said it had sent orders to Apple, Amazon, Facebook, Microsoft, and Google’s parent company, Alphabet, asking for “information about prior acquisitions not reported to the antitrust agencies” the companies may have made over the past decade, a number FTC chairman Joe Simons told reporters is in the “hundreds.”
“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,” Simons said in the statement.
While the inquiry is not a formal law enforcement action, Simons said that “all options are on the table” and, depending on what the FTC discovers, it could look at forcing the companies to unwind past deals or change their business practices. It may also consider updating the reporting requirements for acquisitions.
Businesses are required to report some, but not all, acquisitions to regulators under federal law. However, Simons told reporters that, based on hearings the agency held in the fall, it believes a substantial number of deals made by those companies escaped regulatory scrutiny because they weren’t large enough that companies needed to report them.
Simons said the FTC has a “very broad definition” for what counts as an acquisition under its new probe, including noncompete agreements, licensing deals, and even purchases of large amounts of data.
Specifically, it’s looking into whether any past purchases were intended to head off “a competitive threat to the platform” before it got too big or led to the “monopolization of adjacent markets,”
said Bilal Sayyed, director of the FTC’s Office of Policy Planning.
The agency asked companies 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,” according to its statement.
The announcement comes as major tech companies are already facing a variety of antitrust probes from regulators in both the US and in Europe looking into whether the firms are unfairly undermining competition. The investigations are looking into everything from Google’s advertising business to Amazon Web Services to Facebook’s handling of consumer data and privacy issues.