The US Federal Trade Commission (FTC) has ordered five major tech companies to provide details on acquisitions of smaller companies over the past ten years, according to The Guardian.
Information on the purpose and scope of the acquisitions will help inform antitrust investigations into the five companies, which include Amazon, Apple, Facebook, Google, and Microsoft.
While the FTC must approve major acquisitions before they take place, such as Facebook’s 2012 purchase of Instagram, smaller deals worth less than $90 million do not require approval in advance. The agency says it expects to review “hundreds” of these acquisitions.
The regulator says the information will help determine “whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors,” and whether the current rules have been effective in screening for anticompetitive practices.
The probe is requesting information on deals from between 2010 and 2019, including on how the assets and data were integrated following the acquisitions.
Tech giants have increasingly faced accusations of consolidating their own power by snatching up smaller companies that could threaten their dominance. Critics have called for more action in recent years, as fines and other steps have become increasingly common in Europe.
In the US, the same tech giants are already facing other government probes into potential anticompetitive practices. Simons said the new probe is separate from investigations by Congress, the Justice Department, and a coalition of state attorney generals, into Google and Facebook.
According to the agency’s chairman, Joe Simons, the move “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.”
“If during this study, we see that there are transactions that were problematic, it is conceivable we could go back and initiate enforcement actions to deal with those transactions,” Simons said, noting that “all options are on the table.”
“In those types of markets it’s really important to look at small mergers because a small company is really the only type of company that can exert any competitive pressure,” according to Public Knowledge senior policy counsel Charlotte Slaiman.
Some of the companies saw their shares fall following the FTC announcement.
Photo by Gryffindor [Public domain]