FTC Examining Past Acquisitions by Apple and Other Tech Companies in Ongoing Antitrust Investigation

[MacRumors]

The Federal Trade Commission today announced that it has issued Special Orders to Apple, Amazon, Facebook, Microsoft, Google and Google parent company Alphabet requiring them to report all prior acquisitions not previously reported.

In the United States, companies are required to report acquisitions over a certain value to the FTC under the Hart-Scott-Rodino (HSR) Act, while acquisitions under the value threshold do not need to be reported. The FTC is asking for details on all smaller acquisitions that it did not previously know about. The HSR threshold in 2020 is $94 million, but it is a number that is adjusted by the FTC each year and would have been lower in past years.

The FTC says that it wants the companies to provide information and documents on the "terms, scope, structure, and purpose of transactions" that took place from January 1, 2010 to December 31, 2019 and were not reported under the HSR Act. The FTC wants to learn whether large tech companies are making anticompetitive acquisitions of nascent or potential competitors in deals small enough to go unreported to antitrust agencies.

"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."

Apple and other tech companies will also need to provide the FTC with documents on corporate acquisition strategies, voting and board appointment agreements, agreements to hire key personnel from other companies, and post-employment non-compete agreements. Each company will be asked to offer information on post-acquisition product development and pricing, including whether and how acquired assets were integrated and how acquired data has been treated.

Tech companies like Apple often make many acquisitions per year, and Apple in particular buys a lot of smaller companies. Apple does not provide details on purchase prices, though, so it is unclear how many acquisitions have previously not been reported to the FTC.

In the last few months, Apple has purchased Xnor.ai, Spectral Edge, and IKinema.

Article Link: FTC Examining Past Acquisitions by Apple and Other Tech Companies in Ongoing Antitrust Investigation

 

[V_Man]

And if Apple is found of wrongdoing they will be fined.

 

[cmaier]

And if Apple is found of wrongdoing they will be fined.

There is no allegation of wrong-doing

 

[Cosmosent]

WOW !

One BIG step closer to AAPL losing control of the App Store !

 

[V_Man]

There is no allegation of wrong-doing

Hopefully not.

 

[jonblatho]

And if Apple is found of wrongdoing they will be fined.

…and they’ll make the fine back in profit in a matter of hours at most.

 

[siddavis]

Honest question... does anyone think that "tech" markets are not open and competitive right now?

 

[now i see it]

The FTC wants to learn whether large tech companies are making anticompetitive acquisitions of nascent or potential competitors...

Of course they are. They've been doing it since forever

 

[siddavis]

Of course they are. They've been doing it since forever

Yup, and in most cases, it's not a problem.

 

[StevieD100]

Of course they are. They've been doing it since forever

And a good number of them were startups where the owners wanted to sell to a big corp and they walk away with their pension sorted.
That's commerce. If the FTC thinks that this practice is wrong then get the laws changed to stop ALL takeovers. That won't fly in DC now will it?

 

[V_Man]

…and they’ll make the fine back in profit in a matter of hours at most.

Ok. Never said any different.

 

[Rogifan]

This is a whole bunch of nothing. No sweeping laws or regulations will come of it. Total waste of time.

 

[lkrupp]

WOW !

One BIG step closer to AAPL losing control of the App Store !

Apple should shut down the App Store and let developers fend for themselves, like it was years ago. Develop your app and then try to get noticed in all the background noise. Word of mouth, advertising on websites, etc. Screw these whining crybabies who think they should be able to put whatever they want in Apple's store and not pay anything for the privilege of doing so.

 

[Appleman3546]

While I don’t think any of the acquisitions will be reversed from this disclosure discussed in the article, I am surprised that the reporting threshold is so high. Public companies should be reporting all acquisitions, it would help investors and the public understand when talking about investment or anti-trust.

 

[MauiPa]

WOW !

One BIG step closer to AAPL losing control of the App Store !

hahaha, so funny, NO

 

[farmboy]

Classic fishing expedition here.

 

[Justanotherfanboy]

WOW !

One BIG step closer to AAPL losing control of the App Store !

Lol, one of the two of us has literally zero understanding of this article!

I’m kinda thinking it’s you, man...
to me, it seems EXTREMELY clear that the topic is acquisitions (you know, from both reading the title & the article).
Are you under the impression that Apple acquired the App Store from a different company at some time between January 1, 2010 to December 31, 2019?

 

[kd5jos]

So that I understand:

A rule says if a company has a value greater than X it must be reported if you (a company) purchase it.

The FTC has asked for companies to report purchases of companies of value less than X.

So the FTC is not following the law by asking companies to report on purchases of companies of value less than X.

And there is a law in place to protect the company as they can’t be required to testify against itself in the first place.

So the FTC’s position is:

Although you can not be compelled to incriminate yourself, and we can’t actually ask if you bought companies of a value lower than X...

We want you to get beck to us with that information so that we can potentially use it against you....

Did I get that right?

 

[sideshowuniqueuser]

Apple should shut down the App Store and let developers fend for themselves, like it was years ago. Develop your app and then try to get noticed in all the background noise. Word of mouth, advertising on websites, etc. Screw these whining crybabies who think they should be able to put whatever they want in Apple's store and not pay anything for the privilege of doing so.

There's nothing stopping Apple from running both an app store, and allowing the "try to get noticed in all the background noise" option, just like Google does with Android. The problem is that Apple only allows the app store. It's monopolistic behaviour. You may not agree that monopolistic behaviour is a bad thing in the Land Of The Free, where capitalism rules, but if you do a bit of a google search, you might maybe change your mind.

 

[cmaier]

There's nothing stopping Apple from running both an app store, and allowing the "try to get noticed in all the background noise" option, just like Google does with Android. The problem is that Apple only allows the app store. It's monopolistic behaviour. You may not agree that monopolistic behaviour is a bad thing in the Land Of The Free, where capitalism rules, but if you do a bit of a google search, you might maybe change your mind.

Except that’s not monopolistic behavior any more than McDonald’s refusing to sell Whoppers or Wal-Mart refusing to sell whatever I tell them to.

 

[Tech198]

There is no allegation of wrong-doing

But there should be..

If the ACCC here sees companies do false adverting to customers, you can be they will get fined for that... So why for not obeying what they to provide?

 

[cmaier]

But there should be..

If the ACCC here sees companies do false adverting to customers, you can be they will get fined for that... So why for not obeying what they to provide?

What?

What’s the ACCC?
What does this have to do with false advertising?
What does “so why for not obeying what they to provide” mean?

 

[RedTheReader]

And a good number of them were startups where the owners wanted to sell to a big corp and they walk away with their pension sorted.
That's commerce. If the FTC thinks that this practice is wrong then get the laws changed to stop ALL takeovers. That won't fly in DC now will it?

Interesting point. I can definitely see what you mean, though. If I'd managed to open a tech startup desirable enough for big tech to offer millions for it, I too would probably sell out and walk away. That's not laziness, that's just the founder not wanting to dedicate his entire life to a company that he might have created just to try and make a decent living (while trying to stay self-employed) in the first place.

 

[siddavis]

So that I understand:

A rule says if a company has a value greater than X it must be reported if you (a company) purchase it.

The FTC has asked for companies to report purchases of companies of value less than X.

So the FTC is not following the law by asking companies to report on purchases of companies of value less than X.

And there is a law in place to protect the company as they can’t be required to testify against itself in the first place.

So the FTC’s position is:

Although you can not be compelled to incriminate yourself, and we can’t actually ask if you bought companies of a value lower than X...

We want you to get beck to us with that information so that we can potentially use it against you....

Did I get that right?

When unelected bureaucratic agencies get too big for their britches, they think they can do as they please because they are the "authority" in that arena. Of course they do it all in our name; "This will help us continue to keep tech markets open and competitive, for the benefit of consumers." It's nothing but an additional power grab so someone at the end can say they stood up to the big bad corporations.
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Interesting point. I can definitely see what you mean, though. If I'd managed to open a tech startup desirable enough for big tech to offer millions for it, I too would probably sell out and walk away. That's not laziness, that's just the founder not wanting to dedicate his entire life to a company that he might have created just to try and make a decent living (while trying to stay self-employed) in the first place.

Right, and in most cases, these startups or smaller companies are private. They aren't FORCED to sell or be bought. This idea that they would grow up to be competitors is silly if that was not their intention. What has occurred is the dream for many of them. But don't worry, the FTC is here to protect them from their dreams!

 

[henryhbk]

Where does the FTC's statutory authority come, from if the current law states reporting is over a threshold? I mean they can ask whatever they want, but without that authority they can't enforce it (not like the FTC could sue apple if apple tells them to pound sand - although grudges can last a long time and in the future the FTC could make apple's life hard if it wanted to within its authority).