The US Federal Trade Commission signaled Wednesday that it's about to get tougher on mergers involving Big Tech giants Amazon, Apple, Facebook, Google and Microsoft. At its monthly meeting, the agency released findings of a study of unreported mergers for these five companies.
The study, which had begun during the Trump administration, found that together these five companies had 616 acquisitions from 2010 to 2019 that were above $1 million but were still too small to be reported to antitrust agencies. Under Hart-Scott-Rodino Act, companies are required to report to regulators only transactions that exceed $92 million in value.
, who's seen as a progressive reformer of antitrust, said the FTC should identify loopholes in the federal law that allow some transactions to "fly under the radar."
Another key finding in the report was that more than 75 percent of the transactions included noncompete clauses for founders or key employees of the companies that were being acquired. Khan also addressed this issue, saying the FTC must take a closer look at noncompete agreements in merger transactions.
"Exploring how firms in digital markets may be using acquisitions to lock up talent alongside key assets will be a worthy area of study," Khan said.
Khan added she hoped the report would also be useful to Congress as it
"While the existing law uses deal size as a rough proxy for the potential competitive significance of an acquisition, digital markets in particular reveal how even smaller transactions invite vigilance," Khan said.
FTC Commissioner Rebecca Slaughter, a fellow Democrat of Khan's, said that looking at deals individually wasn't enough to curtail anticompetitive harms. Instead, she said it's important to look at a company's acquisitions in aggregate.
"I think of serial acquisitions as a Pac-Man strategy," Slaughter said. " Each individual merger viewed independently may not seem to have significant impact. But the collective impact of hundreds of smaller acquisitions, can lead to a monopolistic behavior."
Commissioner Christine Wilson, a Republican, called for a similar study of health care mergers.
The report comes as the FTC is already starting to get tougher on the nation's most prominent tech companies. Last year, the commission sued Facebook, alleging that the social media company has violated antitrust law. The FTC has asked the court to overturn Facebook's deals to buy photo sharing app Instagram and instant messaging app WhatsApp. Both those deals had been reviewed by the FTC.
Republicans and Democrats in Congress have also been working together in a rare display of bipartisanship to craft legislation to rein in the power of Big Tech companies. Earlier this summer, the Democrat-controlled House, with wide support from Republicans,that aim to drastically change antitrust law. This followed the release of a , which concluded after its 18-month investigation that the companies use their monopoly power to stifle competition.
In separate news, the agency also voted Wednesday to do away with Trump-era guidelines overseeing vertical mergers or deals in which a company is combined with a supplier. The FTC rarely intervenes in such deals. But it did so in a recent case involving the biotech firm Illumina, which was looking to buy Grail, one of its subsidiaries. The companies are each working to develop and market a blood test that diagnoses multiple cancer types.