FTC Puts Big Tech M&A Under Microscope; Some See Enforcement Steps
A set of FTC Act Section 6(b) orders to Alphabet/Google, Amazon, Apple, Facebook and Microsoft aren't a warning to big tech, though the agency could start a criminal investigation if it finds something problematic in its analysis of their mergers and acquisitions, Chairman Joe Simons said Tuesday. He said the agency will look at "hundreds" of unreported transactions by the companies in 2010-2019 as it tries to decide if deals that fall outside Hart-Scott-Rodino Act reporting requirements nonetheless affect competition, and if those HSR thresholds should change. The FTC announced the 6(b) orders Tuesday (see 2002110020).
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In a call with reporters, Simons said 2018 hearings (see 1809130057) turned up numerous transactions by tech platforms that weren't reportable under HSR. The agency wants to a get a handle on why they weren't and if they were potentially problematic.
Commissioners voted 5-0 to approve the orders, the agency said. Commissioners Christine Wilson and Rohit Chopra said the FTC should look at issues of targeted advertising and content curation. They also mentioned privacy and data security. Simons said the FTC could turn to other industries or issue more orders in the tech industry, though given its resources "we can't do everything we want to do at the same time." He said a targeted ad probe "is not off the table."
The FTC "has undertaken a variety of efforts to determine what benefit consumers are receiving from competition in the digital sector, and the Computer & Communications Industry Association supports retrospective analysis to better understand how the digital economy operates," the group said. "We expect that the FTC will continue to pursue its mandate based on evidence and sound economic analysis." None of the tech companies nor the Internet Association commented.
Such 6(b) studies, "while important, are not the procedure you would use if you were trying to bring a case to unwind a merger," Public Knowledge Senior Policy Counsel Charlotte Slaiman tweeted. Their role is educational, though a 6(b) study can support opening a future investigation, she said.
American Antitrust Institute President Diana Moss emailed that it's a "good use of [FTC] authority" and the agency is seemingly trying to understand issues "that I believe 'sets the table' for a subsequent enforcement action, say, against a consummated deal(s)." One of those issues is the strategic motivation for M&A and how the digital companies are combining intellectual capital, integrating acquisitions and using data and data-enhancement capabilities, she said. Determine if HSR thresholds are set at the right levels to screen for potentially harmful deals in the digital tech space, she said.
Simons said if HSR threshold rules need changing, the agency could do that without congressional authorization. He said the FTC also could use subsequent 6(b) orders to require M&A reporting by big tech -- which also wouldn't need congressional OK.
Office of Policy Planning Director Bilal Sayyed said the agency hasn't decided what information from its probe will be made public. Asked about timeline of results, he said the FTC wants "move quickly" on conclusions.