NEWS13 February 2020

FTC to study smaller deals made by tech firms

Legal M&A News North America Technology

US – The Federal Trade Commission (FTC) is researching past acquisitions by large technology companies to evaluate whether it is getting adequate notice of deals.

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The antitrust agency has ordered Google parent company Alphabet, Amazon, Apple, Facebook and Microsoft to share information on transactions between 1st January 2010 and 31st December 2019.

Acquisitions over a certain size are reviewed by the FTC, but the study will help it determine whether tech giants are making ‘potentially anticompetitive acquisitions of nascent or potential competitors’ that do not need to be reported to antitrust agencies because the companies are smaller.

In addition to identifying deals not reported to the FTC and the US Department of Justice, the companies will need to share information on their acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment covenants not to compete.

The special orders also ask for information related to post-acquisition product development and pricing, including whether and how assets were integrated and how they have treated acquired data.

The FTC will use the study to examine trends in acquisitions and the structure of deals, as well as exploring how small companies perform after being bought by large tech firms.

Joe Simons, chairman of the FTC, said: “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.”