Exclusive: FTC pushed to investigate Meta's Scale AI deal

What they're saying: "This transaction follows Meta's familiar anticompetitive buy or bury strategy," the groups write in a letter to FTC chair Andrew Ferguson shared exclusively with Axios.

• "The structure of the transaction — a non-controlling stake that falls just below the 50% threshold for mandatory reporting — is a deliberate attempt to evade FTC scrutiny."
• "This is a familiar playbook which includes key aspects typical of Big Tech's minority investments in generative AI companies."
• Signers of the letter include Public Citizen, the Tech Oversight Project, the Consumer Federation of America and the American Economic Liberties Project.

Context: Meta announced in June it was investing $14.3 billion in Scale AI, acquiring a 49% stake in the company and also hiring a number of top staffers.

• A Meta spokesperson said at the time of the announcement that "as part of this, we will deepen the work we do together producing data for AI models, and [former Scale CEO] Alexandr Wang will join Meta to work on our superintelligence efforts."
• Sumit Sharma, executive director of NextGen Competition: "The harms extend well beyond model development and aim squarely at cementing Meta's dominance in adjacent markets such as social media and surveillance advertising."

• "Meta already faces an antitrust lawsuit in these markets. Do we really want Mark Zuckerberg and Meta to have even more control over our information ecosystem?"

The groups say the deal is a de facto vertical acquisition meant to exploit gray areas in the law.

• They note that in a January report on AI partnerships the FTC "warned that such deals could give dominant firms access to sensitive technical and business information of their partners."