For a long time, Microsoft escaped the scrutiny placed on FANG companies by the current administration for their business practices, but it seems that the company’s luck has run out, as it has been included in a new probe by the FTC into their acquisition practices.
There is a fairly common belief that large tech companies buy rising competitors just to kill them and thereby suppress competition and ultimately innovation.
To keep a lid on this the FTC examines all large purchases, but any acquisitions bellow $90 million are not normally scrutinized.
Now the FTC has requested information from Google, Apple, Facebook, Amazon, and Microsoft on all acquisitions it closed between Jan. 1, 2010 and Dec. 31, 2019, including those not previously examined under the Hart-Scott-Rodino (HSR) Act.
The request includes disclosure of the company’s acquisition strategies, acqui-hire arrangements and non-compete clauses, and also information related to products that were developed following a merger, the strategies involved in post-merger pricing of products, how the companies integrated acquired assets and data into its operations and how small companies perform after they are acquired by larger tech firms.
FTC Chairman Joe Simons explained the probe by saying: “Digital technology companies are a big part of the economy and our daily lives. 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.”
More than 400 acquisitions in total over the 10 year period are being examined.
Senator Richard Blumenthal (D., Conn.) expanded by saying: “It has been clear for a decade that Big Tech is stifling innovation through its catch-and-kill tactics and unfettered market dominance. Every time that Google, Amazon, Apple, and Facebook acquire the latest cutting-edge artificial intelligence startup, innovative wearable device or emerging social network, they irreversibly squash another generation of novel competitors that could benefit consumers and bolster our nation’s technological advancement.”
For its part, Microsoft commented: “We look forward to working with the FTC to answer their questions.”