The Federal Trade Commission is taking a closer look at acquisitions in the past decade by tech giants Alphabet, Amazon, Apple, Facebook and Google.
The agency issued orders today requiring the five companies to provide information about acquisitions between Jan. 1, 2010, and Dec. 31, 2019, which were not reported to antitrust agencies under the Hart-Scott-Rodino Act.
None of the five companies had responded to requests for comment at the time this story was published.
The special orders require the five companies to provide information and documents on their corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, noncompete agreements and post-acquisition product development and pricing, including whether and how assets were integrated and how data was handled.
“Digital technology companies are a big part of the economy and our daily lives,” FTC chairman Joe Simons said in a statement. “This initiative will enable the commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive, for the benefit of consumers.”
Simons added during a call with reporters that the commission could initiate enforcement actions regarding transactions that were problematic.
Amazon’s key acquisitions during the period include ecommerce site Woot in July 2010 for $110 million, social cataloging site Goodreads in March 2013 ($1 billion), livestreaming platform Twitch Interactive in August 2014 ($970 million), supermarket chain Whole Foods Market in June 2017 ($13.7 billion), home security and smart home company Ring in February 2018 ($839 million) and online pharmacy PillPack in June 2018 ($753 million).
Apple acquisitions during the decade include mobile advertising outfit Quattro Wireless in January 2010 for $275 million, headphone maker and music streaming service Beats Electronics in August 2014 ($3 billion), music and image recognition provider Shazam in September 2018 ($400 million), chip development company Dialog Semiconductor in October 2018 ($600 million) and the smartphone modem business of Intel in July 2019 ($1 billion).
Among Facebook’s acquisitions were Instagram in April 2012 for $1 billion, messaging app WhatsApp in February 2014 ($19 billion), virtual reality company Oculus VR in March 2014 ($2 billion), video advertising company LiveRail in October 2014 ($500 million) and neural interface technology developer CTRL-labs in September 2019 (reports range from $500 million to $1 billion).
Google split up in August 2015 and became multiple subsidiary companies, including one called Google, under the arm of then-new holding company Alphabet.
Its most prominent acquisitions during the period covered by the FTC’s special orders include travel technology company ITA Software in April 2011 for $676 million, online advertising company Admeld in June 2011 ($400 million), mobile device manufacturer Motorola Mobility in August 2011 ($12.5 billion), restaurant review site Zagat in September 2011 ($151 million), social media marketing firm Wildfire Interactive in August 2012 ($450 million), navigation app Waze in June 2013 ($966 million), home automation company Nest Labs in January 2014 ($3.2 billion), talent and intellectual property licenses from mobile handset manufacturer HTC in September 2017 ($1.1 billion) and big data and analytics provider Looker in June 2019 ($2.6 billion).
Commissioners Christine Wilson and Rohit Chopra also issued a warning to the healthcare industry that it is next in the FTC’s sights, saying in a joint statement, “Given the FTC’s significant expertise in the healthcare industry, and the vital importance of quality healthcare services at competitive prices to every American consumer, we encourage the commission to analyze sub-HSR deals in that industry next. During the past three decades, the share of independent dialysis facilities has shrunk drastically, and two national chains now own the majority of dialysis facilities and earn nearly all of the industry’s revenue, with most acquisitions occurring below the HSR thresholds. Similar patterns of ‘stealth consolidation’ have been observed in pharmaceutical and hospital markets.”