Feb 12, 2020 - Technology

Big Tech braces for sprawling FTC acquisitions review

Illustration: Eniola Odetunde/Axios

The Federal Trade Commission announced Tuesday it will review the past decade of takeovers by tech giants Alphabet, Amazon, Apple, Facebook, and Microsoft. Not only the large ones, but also the hundreds of smaller ones that didn't trigger automatic antitrust reviews.

Why it matters: Apparently the FTC thinks it has a technique for getting toothpaste back into the tube. And that's before one considers the knotty logistics of unwinding something like Facebook/Instagram or some random Google acqui-hire from 2015.

The big picture; Antitrust regulators typically get their way just by threatening to block a deal. But they've recently suffered two huge defeats when going after deep-pocketed tech defendants: DOJ on AT&T/Time Warner and state AGs on Sprint/T-Mobile. No pockets are deeper than the ones that FTC is now digging around in.

  • Worth noting: Sen. Josh Hawley (R-Mo.) just proposed to remove the FTC's antitrust function altogether. And it's notable that this announcement wasn't made in concert with DOJ, which today happens to be holding an antitrust workshop at Stanford University.

The state of play: This is going to take a while. Maybe even into a new presidential administration.

  • We're talking about tons of small, niche acquisitions that involve people who may no longer be involved with the participating companies, let alone acquired products that have since been mothballed.
  • It could also involve possible re-reviews of mega-deals like Microsoft/LinkedIn, Amazon/Whole Foods, Google/Nest, Facebook/WhatsApp, Apple/Beats, and more.

The bottom line: This could become a massive headache for the five target companies, but more "take some aspirin and a nap" than "go to the ER."

  • Corporate M&A sources have consistently told me that Washington D.C. rhetoric isn't having too much impact on their acquisition activities, believing that the bark is much worse than the bite.

Go deeper: Small tech firms with Big Tech gripes

Go deeper

Big Tech's small deals pose a quandary for regulators

Illustration: Sarah Grillo/Axios

As regulators review a decade of tech industry acquisitions for signs of monopolistic behavior, proposing remedies is going to be a tough challenge.

Why it matters: Tech companies like Google and Facebook grew giant in part by rolling up startups that are now fully integrated into their businesses. Despite heated antitrust rhetoric, it would be a tall order for regulators to reverse hundreds of deals or force divestitures of the essential business lines those transactions helped build.

Lawmakers add staff to tech antitrust investigation

Illustration: Sarah Grillo/Axios

The House Judiciary antitrust subcommittee is staffing up as it works to finish its investigation into the competitive impact of tech giants.

Why it matters: The House probe's findings will help shape legislation that may aim to toughen antitrust law for the digital era, and they could offer fuel for similar investigations already under way by state and federal antitrust enforcers.

VCs push back on DOJ antitrust concerns

Illustration: Sarah Grillo/Axios

Silicon Valley investors downplayed concerns that big tech companies inhibit startups, during a recent workshop hosted by the U.S. Justice Department and Stanford University's law school.

Why it matters: Antitrust regulators are paying increased attention to Silicon Valley's M&A culture.