FTC to scrutinize acquisitions by the big five tech companies.

The regulator ordered Alphabet, Amazon, Apple, Facebook and Microsoft to turn over information on acquisitions going back 10 years, a step that FTC Chairman Joe Simons said could lead to tougher antitrust rules or enforcement actions against the tech giants.

  • The orders came in response to 23 days of hearings the FTC held from late 2018 through June 2019. FTC commissioners heard about numerous instances in which big tech companies had acquired nascent or potential competitors in transactions that had slipped through the FTC's reporting requirements.
  • "We wanted to get a handle on why they were not reportable, what their transactions look like, whether they were potentially problematic or not and whether there was something we should do about it," Simons told reporters in a call Tuesday afternoon.
  • The orders require the five companies to provide a pile of information and documents on the terms, scope, structure and purpose of transactions that each company made between 2010 and 2019.
  • Companies must identify acquisitions that were not reported to the FTC and U.S. Department of Justice. The threshold for acquisitions that companies must report for approval has varied over the years, but currently sits at $90 million. Other loopholes in the rules allow companies, in certain cases, to avoid reporting transactions valued above that threshold, Simons said.
  • The five companies must further provide the FTC information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and noncompete agreements for ex-employees.
  • Depending on what the FTC learns from the information it gets back from the companies, the FTC could decide to tighten the antitrust rules for companies, either across the board, or just for select companies, Simons said. The FTC could also decide to pursue enforcement actions on past transactions. "All of our options are on the table," he said.
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