February 11, 2020, The Federal Trade Commission issued Special Orders under Section 6(b) of the FTC Act to five large technology firms Alphabet Inc., Amazon.com, Inc., Apple Inc., Facebook, Inc., Google Inc., and Microsoft Corp. requiring them to provide information about prior acquisitions not reported to the antitrust agencies, FTC and the U.S. Department of Justice under the Hart-Scott-Rodino (HSR) Act consummated between January 1, 2010, and December 31, 2019.

The order required these companies required to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, terms, scope, the structure of the deals, agreements to hire key personnel from other companies, and post-employment covenants not to compete, and purpose of transactions. Last, the orders ask for information about post-acquisition product development and pricing, including whether and how acquired assets integrated and how acquired data treated.

The companies need to identify acquisitions and provide information similar to that requested on the HSR notification and report form.

The orders will help the FTC deepen its understanding to examine large technology firms' acquisition trends activity. It includes how these firms report their transactions to the federal antitrust agencies moreover, whether large tech companies are making potentially anticompetitive acquisitions of nascent or potential competitors that fall below HSR filing thresholds and the nature and extent of other agreements that may restrict competition. Therefore do not need to be reported to the antitrust agencies.

The Commission also seeks to learn more about how small firms perform after large technology firms acquire them. These and related issues discussed during several sessions of the FTC's 2018 Hearings on Competition and Consumer Protection in the 21st Century. This study is part of the follow-up from those Hearings. The Act authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose.

The FTC has a statutory right under the HSR Act to review acquisitions and mergers over a specific size before they consummated, and the study will help the Commission consider whether additional transactions should be subject to premerger notification requirements. The orders will also contribute broadly to the FTC's understanding of technology markets, thereby supporting the FTC's vigorous and effective enforcement program to promote competition and protect consumers in digital markets. The Commission vote to approve issuing the Special Orders was 5-0. Commissioners Christine S. Wilson and Rohit Chopra issued a joint statement. The Federal Trade Commission develops policy initiatives on issues that affect competition, consumers, and the U.S. economy.

FTC Chairman Joe Simons said: “Digital technology companies are a big part of the economy and our daily lives. This initiative will enable the Commission to take a closer look at acquisitions in this important sector and evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. It will help us continue to keep tech markets open and competitive for consumers' benefit.”

Source: Press Release
Date: February 11, 2020