EU antitrust inquiry could spell bad news for Google, Facebook, Amazon (Updated)

Update: February 12, 2020 (3:25 PM ET): According to Reuters, a recent European Commission document revealed EU antitrust regulators are preparing to open an inquiry into the tech sector. This report comes right on the tail of the US Federal Trade Commission’s acquisition data request and could lead to more regulatory troubles ahead for major tech companies like Google, Facebook, Amazon, and more.

This inquiry also comes alongside other EU legislation planned this year to dial back some of the power these dominant companies hold. EU competition enforcers are also considering regulating these companies’ business practices even further as a preventive measure to protect smaller upcoming rivals. It hopes this will help European companies compete with other global companies in “new and emerging markets.”

“Additional ex ante regulatory responses may be needed to ensure contestability and protect the interests of smaller players,” said the document.

European Competition Commissioner Margrethe Vestager will officially present the document next month.


Original: February 11, 2020 (1:25 PM ET): In a press release today, the United States Federal Trade Commission requested ten years of data on acquisitions performed by five of the world’s largest tech companies. Those companies include Alphabet, Inc. — the parent company of Google — as well as Apple, Amazon, Facebook, and Microsoft.

According to the FTC, these inquiries do not have “a specific law enforcement purpose.” The government organization is likely looking at acquisitions by these tech giants to make sure there are no anomalies that might present violations of anti-trust statutes.

The request covers all purchases from January 1, 2010, through December 31, 2019.

“Digital technology companies are a big part of the economy and our daily lives,” said FTC Chairman Joe Simons. “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.”

Under the Hart-Scott-Rodino (HSR) Act, companies must report details of acquisitions of a certain size to the FTC. However, if an acquisition does not meet the size requirements, the purchasing company is under no obligation to report it. This FTC request, though, would also apply to these smaller purchases, some of which we, the public, may not even know about.

In addition to details about purchases not covered under the HSR Act, the FTC is also demanding the tech companies in question to submit the following information:

  • Corporate acquisition strategies
  • Voting and board appointment agreements
  • Agreements to hire key personnel from other companies
  • Post-employment covenants not to compete
  • Post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated

While this FTC request will no doubt ruffle some feathers, the five tech companies should have no problem handing over the details assuming nothing’s been done over the past ten years that the FTC would find to be problematic. If there are incriminating details that surface, the FTC would likely take action in response.

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