Huge Tech’s little mergers draw extra U.S. antitrust scrutiny

WASHINGTON, Sept. 15 (Reuters) – U.S. Federal Trade Commission officials on Wednesday presented data on small acquisitions by five major tech companies, and the agency lifted guidelines for vertical mergers that combine a company with a supplier – both steps suggest that plans are tougher on deals.

Following a study begun during the Trump administration, FTC staff found that Facebook (FB.O), Alphabets Google (GoogL.O), (AMZN.O), Apple (AAPL.O) and Microsoft ( MSFT.O.)) Had a total of 616 acquisitions from 2010 to 2019 that were over $ 1 million but were, among other things, too small to be reported to antitrust authorities.

Commissioner Rebecca Slaughter, a Democrat, said it was insufficient to look at the deals individually. “I view serial acquisitions as a Pac-Man strategy. Any single merger, viewed independently, doesn’t seem to have a significant impact. But the collective impact of hundreds of smaller acquisitions can lead to monopoly behavior,” she said.

Commissioner Christine Wilson, a Republican, called for a similar study on health care mergers.

The FTC sued Facebook last year with allegations that the social media company violated antitrust law. It has asked a judge to reverse Facebook’s deals for the photo-sharing app Instagram and the messaging app WhatsApp, despite both being reviewed by the agency. Continue reading

The FTC, which began holding open meetings after progressive Lina Khan took over the presidency in June, also voted to withdraw Trump-era guidelines on vertical deals. Republicans Wilson and Noah Phillips rejected the decision.

The Justice Department said in a statement it was reviewing both the guidelines for vertical mergers and the guidelines for horizontal deals or mergers of competitors.

“The department’s review has already identified several aspects of the policies that require careful consideration and we will work closely with the FTC to update them as necessary,” Richard Powers, acting director of the Antitrust division, said in a statement.

The FTC rarely tries to stop vertical deals, but recently asked a judge to block the deal by biotech company Illumina (ILMN.O) to purchase Grail (GRAL.O). The companies want to market a blood test to diagnose dozens of cancers.

The five commissioners voted along the party lines for a policy statement on a rule requiring consumers to be informed of any unauthorized use of health data. The commissioners also approved a process for accepting contributions on possible rules.

Reporting by Diane Bartz; Editing by Aurora Ellis and David Gregorio

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