Several technology giants, including Amazon, Google, Facebook, Microsoft, and Apple, have received an order from a US regulator to disclose details about their acquisitions of smaller companies over the past decade. The Federal Trade Commission (FTC) has requested that these companies provide information dating back to 2010 to evaluate the impact of these acquisitions on the market. The FTC is concerned that these buyouts may have stifled competition within their respective markets and wants to determine whether these acquisitions remain lawful under new laws and regulations, particularly those pertaining to anti-trust rules.
The FTC is investigating whether acquisitions made by these companies within the same sector or market hindered competition and disrupted natural market forces. Competition within a market is essential as it allows a greater number of businesses to compete within the sector while driving down prices and increasing the quality of the products offered to customers. The FTC has the authority to investigate anything related to law enforcement issues, and there is reasonable evidence to suggest that these companies are engaging in behavior that breaks competition and market regulation rules.
The core of this investigation is to determine whether these acquisitions hindered competition and disrupted natural market forces.
The FTC has not disclosed which companies and acquisitions they are investigating. However, they have stated that they would focus primarily on the buying up of Small and Medium Enterprises (SMEs) rather than large acquisitions, which have to be approved by the regulator before the sale can go ahead. Therefore, acquisitions like Facebook’s purchase of Instagram and Amazon’s acquisition of Whole Foods will not be subject to scrutiny by the FTC.
The announcement from the FTC comes after American lawmakers began publicly discussing reforms of the Federal Trade Commission, accusing it of not holding bigger companies accountable for skirting around regulations that other businesses have to follow, particularly those in ‘Big Tech.’ Plans have already been submitted to the Senate to absorb the regulator into the Department of Justice, but many believe that this would make little positive change for consumers.