FTC Probing Past Apple, Alphabet, Amazon, Facebook, Microsoft Acquisitions

'If, during this study, we see that there are transactions that were problematic, all of our options are on the table,' FTC chairman Joe Simons says. 'It's conceivable we could go back and initiate enforcement actions to deal with those transactions.'

The Federal Trade Commission is requesting information from Apple, Alphabet, Amazon, Facebook and Microsoft about “hundreds” of their past acquisitions that didn’t require regulatory scrutiny but could now face possible “unwinding” by the FTC.

The FTC issued so-called 6(b) special orders requiring the technology giants to hand over information and documents on the terms, scope, structure and purpose of the relevant acquisitions closed between Jan. 1, 2010 and Dec. 31, 2019. Section 6(b) of the FTC Act authorizes the commission to conduct wide-ranging studies that don’t have a specific law enforcement purpose, according to the commission.

The tech companies must provide information on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, non-compete agreements, and information related to post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated. The FTC will look at the benefits and costs associated with the collection and storage of data acquired through acquisitions.

“The responses to these orders will help us better understand whether the federal agencies are getting adequate notice of potentially anti-competitive transactions,” FTC chairman Joe Simons said.

During the FTC’s 2018 hearings on “Competition and Consumer Protection in the 21st Century,” the commission heard about tech platforms’ acquisitions of nascent or potential competitors that didn’t meet the filing thresholds for required pre-merger reporting to the FTC and U.S. Department of Justice under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“This study is part of the follow-up from those hearings,” Simons said. “We’re going to focus on smaller transactions or transactions that were not reportable under the HSR Act. We wanted to get a handle on why they were not reportable, what the transactions looked like, whether they were potentially problematic or not and whether there was something we should do about it.”

The current size-of-transaction threshold for reporting proposed mergers and acquisitions to the antitrust agencies is $90 million, but that figure will increase to $94 million on Feb. 27.

Simons said the study could “definitely inform enforcement,” and “it could result in unwinding.”

“If, during this study, we see that there are transactions that were problematic, all of our options are on the table,” he said. “It's conceivable we could go back and initiate enforcement actions to deal with those transactions.”

The FTC also could determine that additional reporting requirements are needed beyond the current HSR Act rules, or it could issue further 6(b) orders that requires specific reporting from specific companies, according to Simons.

Amazon declined comment. A spokesperson for Microsoft said the company looks forward to working with the FTC to answer its questions.

Apple, Alphabet/Google and Facebook did not respond to CRN inquiries.

The FTC announcement adds another level of scrutiny for the tech platforms, which, in addition to the FTC, also are the subjects of anti-trust investigations by the U.S. Department of Justice, state attorneys general and the House Judiciary Committee

Simons said there are restrictions on what the FTC can share with other agencies when it comes to information gleaned from the 6(b) orders. But, he added, “If we open up enforcement actions, we can get information in a separate way, like through a compulsory process of a CID (civil investigative demand). Then that's a different matter.”