Big Tech Goes on Shopping Spree, Brushing Off Antitrust Scrutiny

By David McLaughlin, Bloomberg

The biggest U.S. technology companies have gone on a buying spree this year, waving off intense scrutiny from competition watchdogs and critics who say they’ve bolstered their power by snatching up nascent rivals.

The number of acquisitions by the five largest companies — Inc., Apple Inc., Alphabet Inc.’s Google, Facebook Inc., and Microsoft Corp. — came at the fastest pace through June since 2015, according to data compiled by Bloomberg.

Tech deals are accelerating even in the face of stepped-up antitrust scrutiny under the Trump administration. Federal officials are investigating Google, Facebook, Apple and Amazon for antitrust violations, and the Justice Department under Attorney General Willliam Barr is expected to file a monopolization case against Google in the coming weeks. Google and Facebook are also contending with investigations by state attorneys general.

A House panel is also conducting an inquiry into the state of competition in the technology sector and the CEOs of Amazon, Facebook, Google and Apple are all slated to testify at a virtual hearing Wednesday.

Through June 30, the five companies announced 27 deals, according to Bloomberg data, up 29% from the same period last year, when they did 21 deals.

The speeding up of tech deals could give ammunition to economists, lawyers and lawmakers who warn that the tech companies have used their abundant cash to gain leverage over existing competitors and increase already high market shares.

“Until there’s some enforcement in this area, companies are likely to think they can get away with it, and if they can get away it, they’re likely to try,” said New York University law professor Scott Hemphill, who has written about deals that eliminate emerging competitors.

An even bigger worry is that the tech companies are potentially choking off competition by acquiring firms that, while small, could one day emerge as robust rivals. After all, the tech giants were all startups once.

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