US: FTC Chairman: we’re looking at big tech’s startup buys

At a conference hosted by Georgetown Law in Washington, DC, Federal Trade Commission (FTC) Chairman Joseph Simons said that the Commission is “thinking about what to do and how to bring cases” regarding big tech companies buying up small startups.

YouTube and Instagram were both young startups when Google and Facebook bought them. More recently, Microsoft proposed to buy GitHub for US$7.5 billion and Amazon bought online pharmacy PillPack for US$1 billion.

“These types of transactions are particularly difficult for antitrust enforcers to deal with because the acquiring firm is, by definition, not a full-fledged competitor,” Simons said. “And also the likely level of competition with the acquiring firm is frequently, maybe more than frequently, not apparent. But harm to competition can nonetheless be significant.”

The FTC has had a series of hearing this month to examine “whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy,” according to the FTC’s website.

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