Tech Giants Quietly Buy Up Dozens of Companies a Year. Regulators are Finally Noticing.
upstart writes:
Tech giants quietly buy up dozens of companies a year. Regulators are finally noticing.:
A soaring number of mergers and acquisitions, many of them never publicly announced, is overwhelming antitrust regulators, a major problem for the Biden administration's hopes of intensifying scrutiny of corporate power centers like Silicon Valley.
Already this year, companies across all industries have sought to buy or merge with others worth at least $92 million almost 3,000 times - roughly 40 percent more than before the pandemic in 2019 - according to federal data. Regulators at the Federal Trade Commission, charged with upholding competition laws alongside the Justice Department, are warning they are unable to adequately review this magnitude of activity.
Regulators and antitrust advocates are particularly worried about acquisitions by Silicon Valley giants. While big acquisitions, like Amazon's plans to purchase MGM, are the subject of press scrutiny and regulatory attention, hundreds of other purchases fly under the radar because of financial market guidelines and antitrust laws, which only require companies to disclose their largest deals. As they seek to take on tech titans' power, regulators are increasingly paying attention to how tech companies gobble up smaller potential competitors before they have a chance to develop enough to provide consumers with serious alternatives.
But limited resources, and what some regulators consider an outdated antitrust framework, represent a direct threat to the administration's goal of cracking down on what it sees as excess corporate power in certain industries. The White House, key policymakers such as FTC Chair Lina Khan and progressives on Capitol Hill have signaled intense interest in taking on monopolies, and the inability to keep up with the pace of mergers represents a major challenge.
Courts also have been deeply skeptical of arguments that tech giants are illegal monopolies, issuing two recent decisions rejecting antitrust allegations made against Facebook and Apple.
That means the quiet and rapid acquisitions of other companies by tech giants is having an unforeseen effect on the economy, experts warn.
We won't know the effects of the concentration that's happening for some time, and neither will the general public," said Krista Brown, a senior policy analyst at the American Economic Liberties Project, a liberal think tank that studies antitrust policy. If we don't have a record of what's happening or what type of oversight and competition enforcement are working, then we will have missed an opportunity to know where things are slipping."
The FTC requires companies to report every acquisition worth more than $92 million. In a study released Wednesday, the FTC said Microsoft, Apple, Google, Facebook and Amazon together made 616 acquisitions from 2010 to 2019 that fell below that reporting threshold but were worth at least $1 million. Many of those acquisitions probably were never disclosed at all.
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