FTC Scrutinizing Apple Acquisitions

By Chand Bellur

February 11, 2020 at 7:44 p.m. PDT

  • The FTC demands Apple, Alphabet, Amazon, Facebook and Microsoft provide additional information about acquisitions.
  • Representatives from smaller tech companies recently appealed to Congress about Apple’s anti-competitive practices.
  • The FTC is gathering information on how large tech companies acquire other enterprises and incorporate their data.

FTC Demands Acquisition Info From Big Tech

Successful corporations continue to grow over time. Acquisitions, an essential strategy for growth, also allow tech companies to integrate another company’s user data. The FTC recently demanded that the largest tech companies, including Apple, provide additional information about acquisitions from 2010 through 2019.

Corporations must disclose merger information for deals valued under $90 million. The FTC is inquiring about smaller mergers.

This is not a formal law enforcement operation by the FTC. Instead, the request is for research purposes. Their stated intent is to discover how large technology companies acquire small companies, and what they do with their staff and data.

FTC chairman Joe Simmons explained their study to reporters:

““We want to at least be aware what we were missing… If during this study we see that there are transactions that turn out were problematic, all of our options are on the table”

In other words, this seems to be a fishing expedition, with the possibility of enforcement action.

A Move to Reign in Big Tech?

The FTC’s action comes amid greater scrutiny of large technology corporations, such as Apple, Alphabet, Facebook and others. For a long time, the companies have been accused of using acquisitions to kill off potential competitors.

FTC Commissioner Rohit Chopra took to Twitter, complaining about unfair practices in Big Tech:

“Many giant companies are convinced that their dominance is due to their genius and innovation. But the truth is that so many can get big by swallowing up or shutting down potential threats. They don’t need to invent killer apps if they can stay on top through killer acquisitions.”

Apple’s stock price, swollen by buybacks and leveraged hegemony, may not respond favorably to possible FTC actions. Although, for now, the commission is simply doing research, their goal is to make technology a more level playing field.

Given a massive budget deficit and a low labor participation rate, the current administration may be looking to shore up the treasury and increase employment. Unlike other industries, tech elites aren’t interchangeable. This makes it difficult to deflect anti-trust actions, unlike other industries.

Apple has a bright future, however, FTC scrutiny is not favorable to their bottom line. The company could face future actions or changes to acquisition rules. This may be why Apple and other tech companies are rapidly increasing lobbying efforts.

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