Diagnosing “Killer” Acquisitions: FTC Market Study to Review Past M&A Deals in Big Tech
John Eichlin, Marie-Marie de Fays; Linklaters
The Federal Trade Commission (FTC) launched a rare market study to investigate whether non-reportable past acquisitions by the major tech companies included “killer” acquisitions of nascent competitors. The study is intended to determine if changes to merger control rules are appropriate to cast a broader net and ensure that potentially problematic deals are reviewed proactively. The initial focus of the review is on the tech sector, but it potentially has much broader implications for the merger rules across industries. And the FTC may turn next to healthcare and other innovative sectors.
Merger
reportability rules in the spotlight
The FTC has sent information requests to five large tech companies (Alphabet / Google, Amazon, Apple, Facebook and Microsoft). These requests reportedly ask the recipients to document their acquisition strategies and outline the details of the transactions they completed over the past decade. In addition to focusing on potential “killer acquisitions” that fell short of the notification thresholds, the requests also target other arrangements, including voting and board appointment agreements and agreements to hire key personnel. Consistent with the FTC’s parallel focus on employment-related issues, the requests also call for information on related post-employment non-competes for key employees.
The FTC has special authority to conduct studies separate from its law enforcement authority. Under this process, the FTC can issue legally-binding orders to companies to obtain information and documents. Typically, the outcome of such studies results in a report summarizing findings, and sometimes including recommendations for further actions. Based on this study, the FTC could explore possible measures to expand reportability requirements or introduce notification rules, without needing congressional involvement, and with implications beyond the tech sector…
Featured News
Chamber of Commerce Sues to Overturn FTC Non-Compete Ban
Apr 24, 2024 by
CPI
FTC Chief Warns of Healthcare Price Fixing Risks Amid Tech Advancements
Apr 24, 2024 by
CPI
Amazon’s Investment in Anthropic Faces Antitrust Scrutiny
Apr 24, 2024 by
CPI
Italian Antitrust Authority Fines Amazon €10 Million for Unfair Trade Practices
Apr 24, 2024 by
CPI
Tuta Mail Raises Alarm Over Google Search Ranking Plunge Amidst DMA Rollout
Apr 24, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI