Government organizations have been increasingly wary of big tech and how it works to bolster its market position. The FTC has been joined by the House Judiciary Committee and Justice Department in investigation how these companies use their size to shut out competition. However, those concerns have come from major acquisition activity. For example, Facebook’s $1 billion purchase of Instagram, Microsoft’s $26 billion deal to buy LinkedIn, and Apple’s $3 billion acquisition for Beats. So far, little attention has been paid to the billions major tech companies have spent buying smaller companies. These purchases often fly under the regulatory radar and arguably do more to harm the competitive landscape.
FTC Order
According to FTC chair Joseph Simons, companies could face legal action although the order is currently for research. “If during the study we see that there are transactions that are problematic … we could go back and initiate enforcement action to deal with those transactions,” said Simons. Despite the clarity of his statement, Simons says the order is not a threat or warning. He said instead the FTC wants to know what more needs to be done to improve antitrust infrastructure. Simons says the study should not take long and will look at “hundreds” of deals cut by major tech companies. “We look forward to working with the FTC to answer their questions,” a Microsoft spokesperson said.
